Global trade hits record $33 trillion by 2024, but tariffs remain uncertain
However, concerns remain about 2025, as risks including an escalating trade war, geopolitical tensions and policy shifts, cloud the outlook.
According to the United Nations trade and development agency (UNCTAD)’S Global trade updateThe projected figure for this year marks a $1 trillion increase over 2023, thanks to strong annual growth of 3.3%.
A significant contributor was services trade, which increased 7%, accounting for half of total growth and adding $500 billion to the value of global trade. Although trade in goods is growing at about 2%, it is still below its peak in 2022.
Cloud of uncertainty 2025
While 2024’s trade performance reflects resilience, the outlook for next year is uncertain, largely due to potential policy changes in the United States under the incoming administration.
“The 2025 trade outlook is clouded by potential US policy changes, including broader tariffs that could disrupt global value chains and impact key trading partners.,” UNCTAD speak.
Trade imbalance and tariffs relative to the United States.
Such measures risk triggering retaliation and spillover effects, affecting industries and economies along the entire supply chain.
“Even the mere threat of tariffs creates unpredictability, undermining trade, investment and economic growth.”, the UN agency warned.
Risk of changing US policy
The countries most affected by changes in US trade policy are likely to be those with large trade surpluses with the country and higher tariff barriers. Based on 2023 merchandise trade figures, these countries include China (trade surplus of about $280 billion), India ($45 billion), the European Union ($205 billion), and Vietnam ( 105 billion USD), according to UNCTAD.
Other countries with trade surpluses, including Canada ($70 billion), Japan ($70 billion), Mexico ($150 billion) and South Korea ($50 billion), may also face some risks. risk, despite imposing relatively lower tariffs on US imports or having signed trade agreements with the country.
Adding to the uncertainty is the trajectory of the US dollar and changes in macroeconomic policy, adding to concerns about global trade.
3rd quarter results
According to the report, Developed economies lead growth in the third quarter of 2024 thanks to stable demand and favorable business conditions.
In contrast, developing economies, which are strong drivers of global trade, face headwinds from falling imports and declining South-South trade. Other sectors also slowed, with energy trade down 2% in the third quarter and 7% overall for the year.
Metals trade also fell 3% – both quarterly and year-on-year, while the auto sector fell 3% in the quarter, despite forecast year-on-year growth of 4%.
High growth sectors such as information and communications technology (ICT) and garments recorded strong growth, up 13% and 14% respectively in the third quarter.
A Singaporean cargo ship docked at a Northern European port after making a busy East Asia-Europe transit journey.
Regional focus
At the national level, Japan leads with a 5% increase in goods exports and a 13% annual increase in services exports. The United States also recorded a 4% increase in goods imports quarter-on-quarter and year-on-year.
The European Union maintains growth in traded services with positive forecasts for the year.
However, developing economies struggled, with China recording a 2% drop in exports in the third quarter, although the country’s services sector saw exports grow 9% annually.
India also faced a decline in quarterly goods trade but posted a modest annual increase, while trade in East Asia was largely stagnant, with imports flat and exports up slightly 1%.
Call for policy action
UNCTAD Secretary-General Rebeca Grynspan emphasized the importance of strategic policy action in developing economies to increase trade diversification and investment in high-value sectors to mitigate risks .
“Trade remains the foundation of sustainable development” she speak.
“To seize the opportunities in 2025, developing economies need coordinated support to overcome instability, reduce dependence and strengthen links with global markets.”
