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Global merchandise trade expanded faster than expected in the first half of 2025, according to the World Trade Organization
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The growth was fueled by booming demand for artificial intelligence-related products and early import shipments ahead of the US tariff increases
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WTO raised its 2025 global trade growth forecast to 2.4% but cut the 2026 forecast to 0.5%
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With tariff hikes taking effect in August, impacts originally projected for mid-year are now expected to materialize later in 2025 and into 2026
Global merchandise trade expanded faster than expected in the first half of 2025, fueled by booming demand for artificial intelligence (AI)-related products and early import shipments ahead of US tariff increases, according to the World Trade Organization (WTO).
WTO raised its 2025 global trade growth forecast to 2.4% from 0.9% but cut the 2026 forecast to 0.5% from 1.8%, based on its latest Global Trade Outlook and Statistics released on October 7.
“Countries’ measured response to tariff changes in general, the growth potential of AI, as well as increased trade among the rest of the world—particularly among emerging economies—helped ease trade setbacks in 2025,” said WTO Director-General Ngozi Okonjo-Iweala.
She noted that South-South trade grew 8% year-on-year in the first half of 2025, while trade among partners excluding China rose 9%.
“The trade resilience in 2025 is thanks in no small part to the stability provided by the rules-based multilateral trading system,” Okonjo-Iweala said. “Yet complacency is not an option. Today’s disruptions to the global trade system are a call to action for nations to reimagine trade and together lay a stronger foundation that delivers greater prosperity for people everywhere.”
Global merchandise trade posted robust gains in the first half of 2025, with volume rising 4.9% year-on-year and trade value up 6% in current US dollar terms.
This follows a modest 2% increase in trade value in 2024.
Key growth drivers included the frontloading of imports in North America ahead of tariff hikes, disinflationary trends, supportive fiscal policies, and strong economic performance in emerging markets.
Industry indicators such as purchasing managers’ indices and national statistics pointed to rising inventories, with North America’s inventories-to-sales ratios climbing across sectors including machinery, motor vehicles, lumber, construction equipment, and non-durable goods.
AI-related goods, particularly semiconductors, servers, and telecommunications equipment, accounted for nearly half of the overall trade expansion in the first half, surging 20% year-on-year in value terms.
Asia delivered strong export performance in AI-related products, reflecting the global surge in investment across the sector.
Trade momentum from early 2025 is expected to taper off as higher tariffs and policy uncertainty begin to unwind the effects of frontloaded imports.
With tariff hikes taking effect in August, impacts originally projected for mid-year are now expected to materialize later in 2025 and into 2026.
READ: WTO releases 2024 edition of World Tariff Profiles
World merchandise trade volume growth is forecast to slow from 2.8% in 2024 to 2.4% in 2025, and further down to 0.5% in 2026.
The WTO highlighted the spread of trade-restrictive measures and rising policy uncertainty as key downside risks. However, continued growth in AI-related goods and services could offer a medium-term boost to global trade.
Regionally, Asia and Africa are expected to lead export volume growth in 2025, followed by moderate gains in South and Central America, the Caribbean, and the Middle East. Europe is likely to see slower growth, while North America and the Commonwealth of Independent States (CIS) face declining exports. Least-developed countries (LDCs) are projected to post strong export gains but may face weakening trends ahead.
On the import side, Africa and LDCs are set to record the fastest growth, while North America is expected to contract. By 2026, only North America, Europe, and CIS are projected to improve export performance, with all regions facing weaker import growth.
WTO has revised its forecast for global commercial services trade, projecting slower growth in 2025 and 2026 as tariff impacts ripple through the broader economy.
Services exports are now expected to grow 4.6% in 2025 and 4.4% in 2026, down from 6.8% in 2024. While these figures are slightly stronger than the WTO’s April forecast, they remain below pre-tariff expectations.
Although services trade is not directly subject to tariffs, WTO economists note that it is indirectly affected through its links to goods trade and overall economic output.
The downgraded outlook for 2025 reflects weaker growth in transport services, which are forecast to expand just 2.5%, down from 4.5% in 2024.
Travel services are expected to grow 3.1%, a sharp slowdown from the 11% surge last year driven by post-pandemic recovery. Other commercial services are projected to grow 5.8%, slightly below 2024’s 6.3%, while digitally delivered services are expected to rise 6.1%, up from 5.7%.
In 2026, transport services growth is forecast to slow further to 1.8%, mirroring the weaker outlook for merchandise trade.
Regionally, Europe is expected to lead services export growth in 2025, followed by Asia, the Middle East, and CIS. North America is projected to post moderate gains, while South and Central America, the Caribbean, and Africa will see the slowest expansions.
In 2026, services exports from Asia and Africa are expected to accelerate, while Europe, CIS, and the Middle East will likely experience a slowdown. North America and Latin America are projected to maintain steady growth.
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