UNCTAD: Global trade endures policy changes and uncertainty
Global trade grew $300 billion in the first half of 2025, led by US imports and EU exports, however, persistent policy uncertainty, geopolitical tensions and signs of slowing global growth pose risks for trade in the second half of the year.
Global trade expanded by an estimated $300 billion in the first half of 2025, despite a slower growth pace, according to the latest Global Trade Update report released on 8 July by UN Trade and Development (UNCTAD).
In the first quarter, global trade grew by approximately 1.5%, with growth expected to accelerate to 2% in the second quarter. Throughout this period, trade in services remained the primary driver of annual growth, increasing by 9% over the last four quarters.
The overall rise in trade value was partly due to price increases. Prices for traded goods edged up in the first quarter and likely continued to climb in the second, even as trade volumes grew by only 1%.
Key trends in global trade:
- Global trade expanded by an estimated $300 billion in the first half of 2025, growing at an estimated 1.5% in the first quarter and projections showing 2% growth in the second.
- Price increases contributed to the overall rise in trade value. Prices for traded goods edged up in the first quarter and likely continued to rise in the second, while trade volumes grew by just 1%.
- Developed economies outpaced developing countries in the first quarter of 2025, reversing recent trends that had favoured the Global South. The shift was driven by a 14% surge in United States imports and a 6% jump in European Union exports.
- Trade imbalances widened during the last four quarters, with the US posting a larger deficit, while China and the European Union recorded growing surpluses.
- Global trade faces mounting headwinds in the second half of 2025, amid persistent policy uncertainty, geopolitical tensions and signs of slowing global growth.
Outlook uncertain as trade faces policy risks and geopolitical turmoil
Looking ahead to the second half of 2025 continued resilience in trade will depend heavily on policy clarity, geoeconomic developments, and supply chain adaptability. On the negative side, global economic growth is expected to slow down in many regions, suggesting that international trade may face slower growth.
Moreover, the potential imposition of higher tariffs in the United States—and the risk of broader trade conflicts—pose significant downside risks. A negative signal also comes from the latest reading of China’s Purchasing Managers’ Index, which often reflects weakening manufacturing activity and can signal reduced demand for imports and softening export orders. However, growing regional integration may provide some support to global trade.
Furthermore, leading indicators such as the Shanghai Containerized Freight Index and the Baltic Dry Index have rebounded from early 2025 lows, although remain below 2024 averages.
The most important factors contributing to heightened uncertainty in global trade for the second half of 2025 are:
- Persisting trade policy uncertainty in the United States
- Potential for retaliatory actions
- Growth in subsidies and inward-looking industrial policies
- Ripple effects along global value chains
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