International Trade and Global Markets

After a rare 3% contraction in global trade in 2023, 2025 is shaping up as a year of modest recovery. The WTO expects global trade in goods to grow by about 2.7% in 2025, with even stronger growth in services trade in many regions . Leading indicators like transport volumes and easing inflation suggest that trade is rebounding from its recent lows .

However, this recovery is fragile. The World Bank has downgraded its 2025 global growth forecast to just 2.3%, warning of a tepid recovery in 2026–27 . Meanwhile, the IMF projects global growth to slow from 3.3% in 2024 to 3.2% in 2025, with advanced economies growing only modestly .

One of the biggest forces shaping 2025 trade is not economics, but politics. Conflicts in Ukraine and the Middle East, along with rising trade policy uncertainty, are major downside risks for global markets . The WTO and UNCTAD both highlight that unpredictable tariff announcements and weaker trade rules are making it harder for firms to plan and invest .

UNCTAD’s 2025 trade update shows that uncertainty itself can be more disruptive than tariffs. In the U.S., imports surged in Q1 2025 as companies front-loaded goods ahead of new tariffs, then dropped sharply in Q2 once those measures took effect . This volatility hits small firms and least developed countries hardest, as they can’t easily move bulky, low-value goods in response to sudden policy changes .

The U.S. remains the world’s top import market, but its trade patterns are changing. In 2025, Mexico has overtaken China as America’s top source of imports, followed by Canada and China . This reflects both supply chain diversification and shifting geopolitical pressures, including threats of broad-based tariffs on major trading partners .

Meanwhile, China’s domestic demand remains a key watchpoint, but its exports are increasingly diversified across multiple markets, helping cushion the impact of weaker U.S. demand . In Asia, countries like Malaysia and Thailand are seeing strong import growth, and the WTO expects Asian export volumes to rise significantly in 2025 . Africa is also emerging as a faster-growing region for exports, with its share of world GDP projected to exceed other regions in 2025 .

Trade in physical goods still matters, but the strategic center of gravity is shifting toward high-value sectors like semiconductors and services. Taiwan is the world’s top chip exporter, and chips are now a key vector in global trade and geopolitics, underpinning everything from AI to smartphones . In Q2 2025, China’s exports were boosted by semiconductors and other high-tech products .

At the same time, services trade is accelerating. In Q2 2025, G20 services exports grew by 4.7%, led by strong growth in travel, ICT, and business services in Europe and elsewhere . For businesses, the lesson is clear: diversifying export markets and investing in services and high-value goods can help build resilience in an uncertain trade environment .

Looking ahead, global trade will likely continue to grow in 2025, but at a slower pace and with more volatility. Normalizing interest rates and policy stimulus in China and Africa could support further growth, but only if geopolitical tensions don’t escalate further .

To navigate this environment, UNCTAD and other institutions call for more predictability: advance notice of policy changes, clear and data-driven trade measures, stronger trade agreements, and better international coordination . For firms and policymakers, the goal is no longer just more trade, but more stable, resilient, and inclusive global markets .