Global Trade to Reach $33 Trillion in 2024 Amid Policy Uncertainties
Discover how global trade is set to reach $33 trillion in 2024, with risks from U.S. policy shifts threatening the 2025 outlook.
Global trade is poised to achieve an unprecedented $33 trillion milestone in 2024, reflecting remarkable resilience in the face of economic and geopolitical headwinds, according to a new report by the United Nations Conference on Trade and Development (UNCTAD). The Global Trade Update, released on Thursday, highlights a $1 trillion increase over 2023, underscoring robust growth, especially in service sectors.
However, the positive momentum may face hurdles in 2025, with potential risks tied to shifting U.S. trade policies, escalating tariffs, and growing geopolitical tensions.
Key Drivers of 2024 Growth
The projected 3.3% annual growth in global trade is attributed significantly to the surge in services trade, which expanded by 7%, adding $500 billion to overall trade value. Although there was a 2% increase in goods trade last year, it still didn’t reach the high point we saw back in 2022.
Developed economies led growth in the third quarter of 2024, benefiting from stable demand and favorable business conditions. High-growth sectors like information and communication technologies (ICT) and apparel demonstrated double-digit increases, surging 13% and 14% respectively over Q3.
In contrast, developing economies faced challenges. South-South trade contracted, with energy trade falling 7% over the year. Metals and automotive sectors also saw declines, recording a 3% drop both quarterly and annually.
Uncertain Prospects for 2025
While 2024 highlights trade resilience, the forecast for 2025 remains clouded by potential U.S. policy shifts, particularly under a new administration. UNCTAD warns that expanded tariffs could disrupt global supply chains and destabilize key trading partnerships.
“Even the mere threat of tariffs creates unpredictability, weakening trade, investment, and economic growth,” the report cautioned.
Nations with substantial trade surpluses with the U.S.—including China ($280 billion), the European Union ($205 billion), India ($45 billion), and Viet Nam ($105 billion)—are at heightened risk. Countries like Mexico, Canada, and Japan, despite their trade agreements or lower tariff exposure, may also face economic ripple effects.
Adding to the complexity are fluctuations in the U.S. dollar and global macroeconomic policies, further intensifying uncertainties.
Regional and Sectoral Highlights
Regionally, Japan stood out with a 5% quarterly rise in goods exports and a 13% annual increase in services exports. The European Union maintained strong service trade growth, bolstered by positive annual projections.
However, not all economies fared well. China experienced a 2% quarterly decline in goods exports, although its services exports surged by 9% annually. India faced similar challenges, with a modest annual increase in goods trade offset by quarterly declines.
Strategic Call for Policy Action
To address looming uncertainties, UNCTAD Secretary-General Rebeca Grynspan called for strategic policy interventions.
“Trade remains a cornerstone of sustainable development,” Grynspan noted. “Developing economies must diversify trade, invest in high-value sectors, and reduce dependencies to navigate the uncertain landscape.”
Her remarks underscore the critical need for coordinated support to help these economies strengthen their global market links and mitigate potential risks.
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