Global Trade to Surpass $33 Trillion in 2024

Showcasing remarkable resilience despite persistent economic and geopolitical challenges, global trade is poised to hit a record $33 trillion in 2024, according to the UN trade and development body (UNCTAD)’s Global Trade Update, which was released on Thursday.

The projected figure for this year marks a $1 trillion increase over 2023, driven by robust 3.3% annual growth. However, concerns loom for 2025, where the risks include escalating trade wars, geopolitical tensions and shifting policies, clouding the outlook, the report said.

A significant contributor was trade in services, which surged by 7%, accounting for half of the total expansion and adding $500 billion to global trade value. Goods trade, while growing at about 2%, has remained below its 2022 peak.

While 2024’s trade performance reflected resilience, the outlook for next year is uncertain, primarily due to potential policy changes in the US under the incoming administration.

“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,” UNCTAD said in the report and added that such measures risk triggering retaliation and ripple effects, affecting industries and economies along entire supply chains.

“Even the mere threat of tariffs creates unpredictability, weakening trade, investment and economic growth,” UNCTAD warned.

Risks of Change in US Policies

Countries most exposed to changes in the 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), the report noted.

Other nations with trade surpluses, including Canada ($70 billion), Japan ($70 billion), Mexico ($150 billion) and South Korea ($50 billion), may also face some risks, despite imposing relatively lower tariffs on the US imports or having established trade agreements with the country.

Adding to the uncertainty is the trajectory of the US dollar and macroeconomic policy shifts, add to global trade concerns.

Q3 Results

According to the report, developed economies led the growth in the third quarter of 2024 on the back of stable demand and favourable business conditions.

In contrast, developing economies, traditionally strong drivers of global trade, faced headwinds with contracting imports and a decline in South-South trade. Other sectors also faltered, with energy trade declining two per cent in Q3 and an overall seven per cent over the year.

Metals trade also contracted 3% – both quarterly and annually, while the automotive sector posted a 3% drop in the quarter, despite an anticipated four per cent annual growth.

High-growth sectors like information and communications technologies (ICT) and apparel, recorded strong growth, surging 13% and 14% over the third quarter.

Regional Focus

On a national level, Japan led with a 5% increase in goods exports and a 13% annual rise in services exports. The US also recorded a 4% rise in merchandise imports on both a quarterly and annual basis. The European Union sustained growth in services traded, with positive projections for the year.

However, developing economies struggled, with China recording an exports’ decline of 2% for Q3, although its services sector saw a 9% annual rise in exports. India also faced quarterly declines in goods trade but posted modest annual gains, while trade in East Asia largely stalled, with flat imports and a marginal 1% growth in exports, the report added.