Global trade volumes forecast to hit record highs in 2025 World trade hits record highs, but new tariffs threaten to derail growth Economic developments
Global trade is showing remarkable resilience despite ongoing economic and geopolitical challenges, and is expected to reach a record $33 trillion in 2024, a UN report said Thursday.
However, the outlook for 2025 is worrying experts. Key risks include an escalation of trade wars, rising geopolitical tensions, and policy changes that create uncertainty.
According to updated data from the United Nations Conference on Trade and Development (UNCTAD), the projected 2024 figure is $1 trillion higher than the 2023 total.
About half of this growth was accounted for by trade in services, which grew by 7 percent. Trade in goods grew by 2 percent, but its volume remains below the 2022 peak.
Uncertainty for 2025
Despite the impressive results in 2024, the outlook for next year remains unclear, mainly due to potential changes in U.S. trade policy under the change of administration.
“The outlook for 2025 is clouded by potential changes in U.S. policy, including the introduction of new or expanded tariffs, which could disrupt global supply chains and impact key trading partners,” the UNCTAD report said.
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Such measures carry the risk of retaliatory measures that could create a chain reaction that will affect industries and economies at all stages of the supply chain.
“The threat of tariffs creates uncertainty that undermines trade, investment and growth,” UNCTAD emphasizes.
Risks for US partners
Countries with large trade surpluses with the US and higher tariff barriers are at greatest risk from changes in US trade policy.
According to data for 2023, these countries include:
∙ China (trade surplus of about $280 billion),
∙ India ($45 billion),
∙ the European Union ($205 billion), dollars),
∙ Vietnam ($105 billion).
Several other countries with trade surpluses with the U.S., including Canada ($70 billion), Japan ($70 billion), Mexico ($150 billion), and the Republic of Korea ($50 billion), may also be at risk despite relatively low tariffs on U.S. imports or trade agreements with the U.S.
An additional element of uncertainty is the fluctuation of the US dollar exchange rate and changes in macroeconomic policies.
Results of the third quarter of 2024
According to UNCTAD, in the third quarter of 2024, the main growth came from advanced economies, which was due to stable demand and favorable conditions for business.
Developing countries, which traditionally drive world trade, faced difficulties: a decrease in imports and a decrease in trade volumes between countries of the Global South.
Some sectors also showed weakness, with energy trade down 2 percent quarter-on-quarter and 7 percent year-on-year. Metals trading fell 3 percent both quarterly and year-on-year.
The automobile sector also posted a 3 percent decline quarter-on-quarter, despite forecast annual growth of 4 percent.
Meanwhile, sectors such as information and communications technology (ICT) and textiles posted double-digit growth rates of 13 percent and 14 percent, respectively, quarter-on-quarter.
Regional Features
At the National Level:
∙ Japan reported a 5 percent increase in goods exports and a 13 percent increase in services exports for the year.
∙ The United States reported a 4 percent increase in goods imports both quarterly and year-on-year.
∙ The European Union maintained its positive momentum in services trade, with a favorable outlook for year-end.
Emerging economies faced headwinds:
∙ China reported a 2 percent decline in goods exports in the third quarter, but services exports rose 9 percent year-on-year.
∙ India reported a decline in goods trade for the quarter, but a slight increase year-on-year. expression.
∙ In East Asian countries, trade growth has virtually stalled, with import volumes stagnating and exports growing by only 1 percent.
A Call for Action
UNCTAD Secretary-General Rebecca Greenspan stressed the need for a strategic approach to developing countries’ trade policies.
She identified priorities: trade diversification and investment in high-income sectors to reduce dependence on volatile markets.
“Trade remains the cornerstone of sustainable development,” Greenspan noted. “To take advantage of the opportunities that open up in 2025, emerging economies need coordinated support to overcome uncertainty, reduce vulnerabilities and strengthen their positions in global markets.”