Market Sentiment Tracker: Return of Quantitative Restrictions and why they matter

While headlines are dominated by inflation rates, jobless claims, and oil inventories, another shift is quietly redrawing the global economic landscape: the return of quantitative restrictions (QRs) on trade. These are not just marginal rules or temporary controls—they represent a fundamental rewiring of how global commerce works. Export bans, licensing requirements, import quotas, and tariff-rate quotas are now covering over $8 trillion in trade value globally since 2017, a scale not seen since before the WTO era.

[ihc-hide-content ihc_mb_type="show" ihc_mb_who="10,13,14,16,18,19,20,21,22,23,24,25" ihc_mb_template="1"]

Now coming back to the quantitative restrictions: The U.S. alone accounts for 195 quantitative restrictions between 2017 and May 2025—more than any other country—including 110 export licensing requirements , many of them aimed at curbing China’s access to high-tech and defense-related goods. China, in return, has announced 181 QRs , using a mix of export controls and import licensing. Brazil and Argentina have leaned heavily into TRQs (tariff-rate quotas), using them as a substitute for blunt tariffs.

This matters more than it seems. Unlike tariffs, which raise prices but allow trade to continue, QRs cap or prohibit quantities outright. This kind of rigidity turns supply chains brittle. Global trade thrives on fluidity—prices shift, contracts adjust. But when trade is stopped at the border once a quota is filled, it distorts inventory planning, investment decisions, and pricing far beyond just one shipment. In 2025, the top targeted sectors include high-end equipment (746 global restrictions), defense products (365), ICT goods (184), and semiconductors (62). These are the exact sectors driving innovation, productivity, and geopolitical leverage.

The most disturbing part is not just how widespread QRs are, but how normalized they’ve become. Countries that once championed open trade—especially the U.S.—are now leading the QR charge. With Biden’s licensing rules and Trump’s 2024 move to impose a 10–25% TRQ on British car exports, both sides of the political aisle are converging on a protectionist logic. And that’s despite strong U.S. macro data: mortgage applications are up 9.4%, jobless claims are falling, and inflation expectations are easing to 3.0%. In other words, there’s no immediate crisis forcing this shift—it’s strategic.

Globally, QR use intensified after 2020 and peaked again in 2022. That year alone saw 112 global export bans and 83 import licensing requirements . This wasn’t just about COVID; it was about discovering how effective these tools were in controlling critical flows—first medical, then industrial, and now technological.,

In Europe, Germany’s trade surplus improved to €18.4B, but its exports fell -1.4% and imports plunged -3.8%. Italy’s industrial output is down -0.7% MoM, and consumer sentiment across the eurozone is weakening. These soft spots are made worse by the uneven impact of QRs, which disrupt supply chains without raising revenue (unlike tariffs) and disproportionately affect small and mid-sized exporters. China is seeing a modest export recovery (+5.8% YoY), with credit and lending surging. But its domestic demand is fragile—house prices down -3.5%, CPI flat at 0.1%, retail sales missing forecasts. In this environment, QRs from the West targeting China’s tech exports only deepen the incentive for Beijing to push hard on self-reliance, accelerating decoupling rather than resolving trade disputes.

Quantitative restrictions are not just a policy tool—they’re a signal. They tell markets that governments no longer trust open trade to deliver strategic or economic security. The global economy is shifting from price signals to permission structures. And in a world governed by permits, licenses, and quotas, the friction of doing business multiplies.

In the second half of 2025, even if inflation cools and jobs rebound, this QR-driven trade regime will quietly make global growth harder, slower, and more politically entangled. The risk is fragmentation. And once supply chains fracture around government-issued limits, reassembling them takes far more than a rate cut.