The United Nations Trade and Development (UNCTAD) published its final Global Trade Update on December 8, 2025, declaring 2025 a landmark year for international trade. Global trade in goods and services is projected to exceed $35 trillion for the first time, reflecting a robust 7% increase ($2.2 trillion added) over 2024. Goods trade accounts for approximately $1.5 trillion of this growth (6% year-over-year), while services contribute $750 billion (nearly 9%). This expansion marks a strong recovery from the stagnation of 2023–2024, with trade consistently outpacing global economic growth in real terms.

However, momentum slowed in the second half of the year due to geopolitical tensions, rising costs, and uneven demand. The report, based on national statistics and a Q4 nowcast (as of December 2, 2025), emphasizes resilience driven by developing economies, particularly in East Asia and Africa, while forecasting a more cautious outlook for 2026.

Key Trade Trends in 2025

Trade growth remained positive but decelerated:

• Q3 2025: +2.5% quarter-on-quarter (QoQ) overall (+2% goods, +4% services).
• Q4 2025 nowcast: +0.5% QoQ goods, +2% QoQ services.
• Trailing four quarters (T4Q): Strong annual growth, with developing economies leading exports.

A notable shift occurred in drivers: Early 2025 gains were partly price-inflated (Q2–Q3 increases), but Q4 and late-year growth stem primarily from higher volumes as goods prices decline. This volume-driven expansion signals stable underlying demand amid cooling inflation.

Regional Leadership: East Asia, Africa, and South-South Trade

Developing regions powered the year’s gains:

• East Asia → Strongest export growth (+9% T4Q), bolstered by +10% intra-regional trade.
• Africa → Above-average performance, especially in imports and intra-regional flows.
• South-South trade (among developing economies) → +8% T4Q, enhancing diversification and resilience.

Goods trade growth (Q3 QoQ and T4Q):

Category	Imports QoQ	Exports QoQ	Imports T4Q	Exports T4Q
Developed countries	1%	2%	6%	4%
Developing countries	2%	2%	6%	8%
Developing (excl. East Asia)	4%	2%	4%	5%
South-South trade	–	1%	–	8%

Intra-regional trade surged in South America and Africa. Q3 highlighted strong growth in South America and the Pacific, while East Asia dominated annual gains.

Major Economies: Divergent Paths

Performance varied across key players (goods trade, Q3 2025):

• Strong performers: Brazil (+6% imports QoQ), Republic of Korea (+5% exports QoQ), South Africa (+10% exports QoQ).
• Weaker: Japan (-2% exports QoQ), United States (-2% exports QoQ).
• China: Remained top exporter (+7% T4Q exports), with flat QoQ exports but rising imports.

Services trade showed greater resilience, led by exports from China (+16% T4Q), India (+13% T4Q), and the Republic of Korea (+7% T4Q).

Imbalances and Geoeconomic Trends

Goods trade imbalances stabilized quarterly but remained elevated annually. China’s surplus narrowed in Q3 yet exceeded Q3 2024 levels; the US deficit improved. Bilateral imbalances persisted (e.g., large US deficits with China, Mexico, Viet Nam).

Geoeconomic shifts gained traction in Q3:

• Friendshoring (trade with politically aligned partners) → Reversed declines, approaching 2021 averages.
• Nearshoring (geographic proximity) → Modest gains.
• Trade concentration → Increased among the largest economies.

Interdependence evolved, with rising ties between the US and partners like Malaysia/Viet Nam, and Russia with China/India.

Sectoral Highlights: Manufacturing Dominates, Energy Lags

Sectoral growth was uneven:

• Manufacturing → +10% T4Q, driven by electronics (+8–14%, boosted by AI demand) and iron/steel (+40%).
• Agriculture → Sharp Q3 gains (cereals/fruits/vegetables +11% each).
• Natural resources → Declined (-11% T4Q mineral fuels due to price drops).
• Automotive → Overall weak (0% T4Q transport sector), partially offset by hybrids.
• Energy → Fossil fuels down; renewables volatile (batteries/wind up, solar/minerals down).

Selected sectoral growth rates (goods):

Sector	Subsector	QoQ (%)	T4Q (%)
Agriculture	Cereals	11	-10
	Fruits/vegetables	11	7
Natural Resources	Mineral fuels	-1	-11
Manufacturing	Electrical machinery	2	8
	Iron/steel	4	40
	Machinery	4	15
	Transport (autos)	3	0

Outlook for 2026: Muted Growth Ahead

Despite 2025’s records, UNCTAD anticipates slower trade expansion in 2026 due to:

• Weaker global economic growth.
• Rising trade costs (tariffs, regulations, logistics).
• Geopolitical fragmentation and policy uncertainty (e.g., US negotiations).
• Overcapacity risks prompting restrictive measures.
• Mounting debt in developing countries is constraining demand.

Positive supports:

• Continued South-South and intra-regional trade expansion.
• Emerging economy import demand.
• Growth in digital/AI and environmental sectors.
• Expected interest rate easing.

The report underscores that supportive policies and openness in developing regions could mitigate slowdowns, but uneven regional and sectoral performance is likely.

In summary, 2025 demonstrated trade’s resilience, propelled by developing economies, volume growth, and high-value sectors like electronics and services. Yet, structural challenges and geoeconomic realignments signal a transitional phase, with 2026 requiring adaptive strategies to sustain momentum.

For the report, click here