Global trade is poised to hit a record USD 33 trillion in 2024, showcasing remarkable resilience despite persistent economic and geopolitical challenges, a UN report revealed on Thursday.
However, concerns loom for 2025, where the risks include escalating trade wars, geopolitical tensions and shifting policies, clouding the outlook.
According to the UN trade and development body (UNCTAD)’s Global Trade Update, the projected figure for this year marks a USD 1 trillion increase over 2023, driven by robust 3.3 percent annual growth.
A significant contributor was trade in services, which surged by seven percent, accounting for half of the total expansion and adding USD 500 billion to global trade value. Goods trade, while growing at about 2 percent, has remained below its 2022 peak.
Uncertainties cloud 2025
While 2024’s trade performance reflected resilience, the outlook for next year is uncertain, primarily due to potential policy changes in the United States under the incoming administration.
“The 2025 trade outlook is clouded by potential US policy shifts, including broader tariffs that could disrupt global value chains and impact key trading partners,” UNCTAD said.
Such measures risk triggering retaliation and ripple effects, affecting industries and economies along entire supply chains.
“Even the mere threat of tariffs creates unpredictability, weakening trade, investment and economic growth,” the UN body warned.
Risks of change in US policies
Countries most exposed to changes in US trade policy are likely those with large trade surpluses with the country and higher tariff barriers. Based on 2023 figures for trade in goods, these include China (about USD 280 billion trade surplus), India (USD 45 billion), the European Union (USD 205 billion) and Viet Nam (USD 105 billion), according to UNCTAD.
Other nations with trade surpluses, including Canada (USD 70 billion), Japan (USD 70 billion), Mexico (USD 150 billion) and the Republic of Korea (USD 50 billion), may also face some risks, despite imposing relatively lower tariffs on US imports or having established trade agreements with the country.
Adding to the uncertainty is the trajectory of the US dollar and macroeconomic policy shifts, add to global trade concerns.
Third quarter results
According to the report, developed economies led the growth in the third quarter of 2024 on the back of stable demand and favourable business conditions.
In contrast, developing economies, traditionally strong drivers of global trade, faced headwinds with contracting imports and a decline in South-South trade. Other sectors also faltered, with energy trade declining two percent in Q3 and an overall seven percent over the year.
Metals trade also contracted three percent – both quarterly and annually, while the automotive sector posted a three percent drop in the quarter, despite an anticipated four percent annual growth.
High-growth sectors like information and communications technologies (ICT) and apparel, recorded strong growth, surging 13 percent and 14 percent over the third quarter.
Regional focus
On a national level, Japan led with a five percent increase in goods exports and a 13 percent annual rise in services exports. The United States also recorded a four percent rise in merchandise imports on both a quarterly and annual basis.
The European Union sustained growth in services traded, with positive projections for the year.
However, developing economies struggled, with China recording an exports’ decline of two percent for Q3, although its services sector saw a 9 percent annual rise in exports.
India also faced quarterly declines in goods trade but posted modest annual gains, while trade in East Asia largely stalled, with flat imports and a marginal one percent growth in exports.
Call for policy action
UNCTAD Secretary-General Rebeca Grynspan emphasised the importance of strategic policy action in developing economies to enhance trade diversification and invest in high-value sectors to mitigate risks.
“Trade remains a cornerstone of sustainable development,” she said.
“To seize the opportunities in 2025, developing economies need coordinated support to navigate uncertainty, reduce dependencies and strengthen their links to global markets.”
