Policy uncertainty cost businesses US$202 billion in 2025 - and the stakes for 2026 are bigger

A new ICC report with Oxford Economics puts a price tag on policy volatility, for the first time quantifying its impact on real business investment across the world's largest economies - and the value of predictability itself.

When the political environment is unstable, business does what business has to do: it waits. Boards delay capital projects, supply-chain decisions are postponed, hiring pauses, and the cost compounds. ICC and Oxford Economics have now put a price tag on that pattern. In a new report published in April 2026, they estimate that the surge in global economic policy uncertainty in 2025, driven primarily by trade policy volatility and culminating in the April 2025 "Liberation Day" tariff package, cost businesses around US$202 billion in lost or delayed investment across ten major economies, equivalent to 0.2% of global GDP.

The figure is large in its own right. It is bigger than the entire United States defence procurement budget for FY2025 (around US$167 billion). It is more than double the global capital spend of Alphabet, Google's parent company, in a year of breakneck AI-driven expansion. And it is a conservative estimate — capturing only the direct, measurable impact on real business investment, holding other factors constant.

The size of the underlying shock was itself unprecedented. The Global Economic Policy Uncertainty Index in 2025 reached its highest level on record, surpassing both the global financial crisis and the early phase of the COVID-19 pandemic. The damage was unusually broad-based: every one of the ten economies in the sample, Brazil, Canada, China, the EU-4 (France, Germany, Italy, Spain), India, Japan, Mexico, South Korea, the United Kingdom and the United States, together about 70% of world GDP, saw real business investment dragged down. Across the sample, investment grew just 0.4% in 2025. Absent the uncertainty shock, it would likely have grown more than four times faster, at 1.9%.

The geographical pattern is instructive. Mexico and Canada were hit hardest in relative terms, with investment 6.8% and 5.3% below their counterfactual paths - losses comparable to a meaningful share of the contractions seen during the global financial crisis and the COVID-19 pandemic. The United States incurred the largest absolute loss, around US$74 billion, although a powerful AI-driven investment boom masked the underlying drag in the headline figures. South Korea, hit simultaneously by a domestic constitutional crisis and intensifying US trade pressure, saw investment 2.9% below the counterfactual. The United Kingdom, with a more services-led economy and lower exposure to US trade policy, was the least affected.

The stakes for 2026 are higher still. The report models two scenarios. Under an adverse case - a renewed uncertainty shock of historical magnitude hitting all ten economies in Q2 2026 - real business investment could fall by 2.7%, or roughly US$380 billion, equivalent to 100% of FDI inflows to North America in 2025. Under a favourable case in which policy clarity is restored, investment could rise 1.8%, or US$252 billion. The gap between those two outcomes, more than US$630 billion, is, in effect, the value of policy clarity.

The report's policy conclusion is deliberately non-partisan. Reducing the cost of uncertainty does not require policymakers to choose any specific direction; it requires clarity, consistency and predictability in how decisions are designed, sequenced and communicated. As the authors put it, "the way in which governments and international institutions manage the uncertainty that surrounds their decisions may matter as much as the decisions themselves."

For Dutch businesses operating internationally, the takeaway is concrete. Predictability has moved from a political ideal to a balance-sheet item: something to be actively managed, monitored and, where possible, defended. ICC Netherlands will continue to advocate for policy stability, both in the global trade conversation and in the rule-making channels where Dutch business is represented.

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For further details on the modelling or to discuss the findings, please contact Melanie Laloum at ICC.