Overall, trade growth has been positive in the first half of 2025, despite increasing trade policy uncertainty, ongoing geopolitical tensions, and a challenging global economic environment. In the first quarter of 2025, global trade trends continued the gradual upward trajectory that began in the second half of 2023. Over recent quarters, both goods and services trade have shown consistent growth, largely driven by the strong performance of developing countries. However, in Q1 2025, developed economies outpaced developing ones in trade growth—primarily due to a surge in imports by the United States ahead of anticipated tariff increases, and robust export activity from the European Union. In contrast, South–South trade remained relatively subdued, although Africa registered strong export growth. Nowcasts for Q2 2025 point to continued growth in both goods and services trade. Preliminary data show that China’s exports remained resilient in April and May, driven by rising intra-regional trade and trade with Africa. United States’ exports also increased in April. However, imports into the United States fell sharply QoQ, reflecting the impact of newly imposed tariffs and the unusually high volume of imports in Q1, as businesses rushed to bring in goods ahead of the tariff increases.
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. Moreover, 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
The United States adopted a 10 per cent baseline tariff, with additional tariffs on specific countries currently on hold. Moreover, it imposed additional import duties on steel and aluminum. While the 10 per cent rate is expected to remain, uncertainty is growing over potential pauses, exemptions, new broad-based tariffs targeting specific countries, and additional product-specific duties— such as those affecting the automotive sector.
Potential for retaliatory actions
While retaliatory trade policy measures have been so far limited, a further increase in unilateral trade measures could trigger retaliation, leading to escalating trade tensions that can spill over to third-party countries not directly involved in the disputes.
Growth in subsidies and inward-looking industrial policies
Domestic-focused industrial strategies could intensify through 2025, with an increased use of domestic subsidies and trade-restrictive policies aimed at supporting national industries. This is likely to weigh on international trade, especially in strategic and high-tech sectors.
Ripple effects along global value chains
Trade policy uncertainty targeting specific segments of global value chains affects not only the intended countries and sectors but also interconnected segments across the value chain. Given today’s deeply integrated production systems, such measures can disrupt entire supply networks and drive substantial shifts.