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Trade in 2025

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Predictably unpredictable

  • 2025 is looking uncertain for trade given questions about policy, protectionism, geopolitics, and shipping disruption…
  • …but trade flows are holding up, and digital services trade and trade liberalisation are potential bright spots
  • With supply chains continuing to shift, some countries will see their export volumes grow

Trade flows have held up well in 2024 but international trade faces a renewed era of uncertainty as we head into 2025. As markets prepare for potential US policy shifts, geopolitical tensions, shipping disruption and rising protectionism continue to cloud the outlook and encourage supply chain shifts.

Against this backdrop, the question is: can trade continue to be an engine of growth for key economies around the world?

There has been plenty of uncertainty in 2024, too, but global goods trade volume growth seems to be holding up for now. Our global economists currently expect world export volumes of goods and services to grow by around 2% in 2025. The risks are firmly tilted to the downside, however.

Businesses will be watching closely for when, how and on which goods proposed US tariffs are implemented, and, crucially, how the US’s trading partners might react. There is also a risk that protectionism persists elsewhere. Already, over the past year jurisdictions including the EU and Malaysia have introduced new rules restricting market access for certain goods from specific economies.

Rising protectionism more broadly could lead to more foreign direct investment “jumping” tariff walls in certain markets. And supply chains could well shift further as economies and businesses look to reduce risk and diversify their trading relationships.

But it is far from all doom and gloom.

Some emerging markets are likely to be relative beneficiaries of these supply chain shifts. For instance, according to IMF data, Bangladesh, Cambodia, Indonesia, Vietnam and Philippines could see their export volumes grow by 5% or more on average over the next five years.

Another bright spot for trade in the coming year could be the ongoing development of digital services – that is, those that are provided or consumed through digital platforms. Although such services are notoriously difficult to measure accurately, the World Trade Organization estimates that global exports of digitally delivered services reached USD4.3trn in 2023, accounting for more than half of total services exports. Markets like India and ASEAN as well as some countries in the Middle East and North Africa could be well placed to benefit if digital services exports continue to expand.

USD4.3trn
Value of digital services exports in 2023 (WTO)
>5%
Forecast average annual export volume growth 2024-29, Vietnam (IMF)

What is more, despite ongoing turbulence, several markets continue to pursue trade liberalisation. Economies looking to make further progress on free trade agreements – either under negotiation or already concluded – in 2025 include India with various partners such as Australia, the UK and European Union, the UK and the Gulf Cooperation Council, and the European Union and the South American nations represented by Mercosur.

Therefore, looking ahead, the one thing we can confidently say for certain is that 2025 will be highly uncertain when it comes to trade policy, with both ups and downs.

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