Global trade remains strong despite policy changes, uncertainty: UNCTAD

Trade in both goods and services recorded solid gains compared with the first quarter.

Global trade expanded by about $500 billion in the first half of 2025, despite volatility, policy shifts and persistent geopolitical tensions. Momentum remained strong into the third quarter, even as growth patterns varied across regions and sectors, according to UNCTAD Global Trade Update (October 2025).

Trade in both goods and services recorded solid gains compared with the first quarter. Goods trade growth edged up from about 2% to 2.5% quarter over quarter, while services trade rebounded after contracting in the first quarter.

Manufacturing remained the main driver of global trade growth in the second quarter, led by the electronics sector. Strong demand for hybrid and electric vehicles continued to boost the automotive industry, reinforcing manufacturing’s central role in the current phase of trade expansion.

UN Trade and Development’s nowcast shows continued growth in the third quarter, with goods expected to expand by about 2.5% quarter over quarter and services accelerating sharply to around 4%. On a rolling annual basis, growth remains robust – about 5% for goods and 6% for services.

Prices for traded goods rose slightly in the second quarter, with preliminary estimates pointing to a marked increase in the third.

This suggests that while the rise in global trade value during the first half of the year was driven mainly by higher volumes, growth in the third quarter will be partly fuelled by rising prices.

Growth in the second quarter was driven primarily by developing economies, supported by rising South–South trade. Weak United States trade performance weighed on the global average.

Global imbalances in goods trade, which had widened in recent quarters, narrowed in the second quarter of 2025, largely reflecting shifts in United States trade policy.

Barring major shocks in the final months of the year, global trade is on track to surpass its 2024 record.

Despite turbulence from shifting US trade policy, global trade dynamics have so far shown limited disruption, though uncertainty over future policy remains a key risk. Geopolitical instability also continues to weigh on trade, with persistent conflicts that could further disrupt regional dynamics and heighten concerns over energy and food security.

© ZAWYA