Global trade is poised to hit an all-time high of nearly $33 trillion in 2024, up $1 trillion from the previous year.
This 3.3% annual growth has been driven largely by a 7% rise in trade in services, contributing $500 billion to the overall expansion. Trade in goods has grown at a slower 2% this year, remaining below its 2022 peak.
Developed countries outpaced developing nations in third quarter trade growth.
In the third quarter of 2024, developed economies led global trade growth, supported by stable demand and improving business conditions. Imports for this group grew 3% for the quarter, while exports increased 2%.
- Japan recorded the strongest quarterly growth in goods exports (5%) and the highest annual rise in services exports (13%).
- The United States saw merchandise imports rise 4% both quarterly and annually, with exports increasing 2% on the year and 1% in the quarter.
- The European Union maintained robust growth in services trade, with both imports and exports expected to stay positive for the year.
By contrast, developing regions struggled during the same period. Imports fell 1% for the quarter, while rose by just 1%. Trade between developing countries, known as South-South trade, dropped 1% for the quarter, reversing earlier trends. However, developing countries’ trade remained positive on an annual basis, growing by about 3%.
- China saw goods imports decline 1% for the quarter and goods exports fall 2%, while services imports dropped 1% for the quarter. However, services exports continued to grow, up 9% quarterly and 9% annually, with services imports rising 17% for the year.
- India posted declines of 1% in goods imports and 3% in goods exports for the quarter but saw services imports and exports both increase by 1%. On the year, goods imports rose 4%, while exports grew 2%.
- East Asia’s trade stalled, with no growth in imports and a mere 1% rise in exports for the quarter.
ICT and apparel drove growth, while the automotive sector declined.
Trade in information and communications technology (ICT) products and apparel led sectoral growth in the third quarter of 2024.
- Trade in communication equipment grew 13% for the quarter, significantly outpacing the sector’s modest 1% annual increase.
- Imports and exports of office equipment rose 13% for the quarter – in line with the sector’s strong 15% growth for the year.
- The apparel sector posted a robust 14% quarterly increase in trade – in stark contrast to its 5% annual decline.
The growth in these sectors stands in contrast to declines in others.
- Road vehicles saw a 3% drop in trade values in the third quarter due to slowing demand, but the sector is still expected to post 4% growth for the year.
- Energy trade fell 2% for the quarter and 7% on the year.
- Metals imports and exports declined 3% both quarterly and annually.
- Textiles trade dropped 4% in the quarter, with no growth reported for the year.
Uncertainty looms over 2025 amid risks of trade tensions and ongoing geopolitical challenges.
The 2025 trade outlook is clouded by potential US policy shifts, including broader tariffs that could disrupt global value chains and impact key trading partners.
Countries most exposed to changes in US trade policy are likely those with large trade surpluses with the country and higher tariff barriers. Based on 2023 figures for trade in goods, these include China (about $280 billion trade surplus), India ($45 billion), the European Union ($205 billion) and Viet Nam ($105 billion).
Other nations with trade surpluses, such as Canada ($70 billion), Japan ($70 billion), Mexico ($150 billion) and the Republic of Korea ($50 billion), may also face some risks, despite imposing relatively lower tariffs on US imports or having established trade agreements with the country.
The US dollar’s uncertain trajectory and US macroeconomic policy changes add to global trade concerns.
reference: https://unctad.org/publication/global-trade-update-december-2024