Global trade expanded by $300 billion in the first half of 2025 despite slowing growth momentum, according to a United Nations Trade and Development (UNCTAD) report released Tuesday. While services trade surged 9% year-on-year, policymakers warn of mounting risks from geopolitical tensions and weakening economic indicators.
Growth Driven by Prices, Not Volumes
The 1.5% Q1 and projected 2% Q2 trade growth masks a stark reality: rising prices accounted for most gains, with physical trade volumes growing just 1%. This inflationary pressure reflects ongoing supply chain adjustments and energy market fluctuations.
Developed Economies Outpace Developing Nations
Merchandise trade patterns revealed diverging fortunes. A 14% import surge in the United States and 6% EU export growth propelled developed economies, while developing countries lagged. The U.S. trade deficit widened significantly, raising concerns about sustained imbalances.
Tariff Risks Cloud Horizon
UNCTAD singled out recent U.S. steel/aluminum tariffs and proposed 10% baseline duties as fragmentation risks. "Unilateral actions could trigger retaliatory measures," the report cautioned, noting global trade growth projections remain suspended until Q4 data clarifies trends.
For businesses and investors, the findings underscore the need for agile strategies balancing Asia's manufacturing hubs with service-driven opportunities in tech and logistics.
