Global trade grew by $2,5-trillion in 2025, increasing by about 7,5% to a record of $35-trillion, according to the latest edition of the Global Trade Update from the United Nations Conference on Trade and Development (UNCTAD).
Trade in goods drove most of the expansion, growing by about 7% and adding roughly $1,8-trillion to global growth.
Trade in services grew by around 8%, contributing about $700-billion to the total increase.
Trade growth was widespread but stronger for developing economies in East Asia and Africa. South-South trade outpaced the global average, expanding by about 9% and underscoring the growing weight of developing economies on world trade.
Momentum carries into 2026, but risks are rising
The strong trade growth of 2025 appears to have carried into early 2026. Preliminary data from major economies and key indicators point to continued expansion in goods trade – though signs of a slowdown in services are emerging.
However, this positive trend remains fragile. Global trade growth is expected to slow later in 2026, weighed down by persistent trade tensions and rising trade costs.
The ongoing conflict in the Middle East and the shipping disruptions in the Strait of Hormuz are expected to intensify inflationary pressures on an already strained global economy facing geopolitical tensions, policy shifts and limited fiscal space – the room governments have to increase spending or cut taxes.
Rising energy prices, together with higher trade costs linked to tariffs, regulatory changes and the erosion of trade rules, further cloud the outlook.
AI and green industries support growth amid volatility
On the upside, strong global demand for AI-related goods, digital technologies and some green-industry products should remain strong and could help sustain trade’s overall performance.
This trend is already visible. The surge in AI- and ICT-related trade drove much of the manufacturing sector’s expansion in 2025 and is expected to remain an engine of growth in the coming quarters.
By contrast, energy trade remained volatile, and the automotive sector stayed subdued amid rising protectionism.
US-China trade slump reshapes global flows
A persistent feature of recent trade dynamics is the sharp contraction in trade between the US and China, which fell by roughly one-quarter in 2025, or about $170-billion.
Yet global trade has adapted. Several “connector economies” have emerged, acting as intermediaries. Serving often as logistical hubs or assembly points, economies such as Cambodia, Egypt, Viet Nam and Indonesia are helping to stabilise trade flows, support global growth and cushion the impact of increasing geopolitical fragmentation.