The global trading system is weathering a turbulent 2025, with economic resilience tested by policy uncertainty, rising tariffs, geopolitical tensions, and the dominance of Big Tech in digital markets. The latest Global Trade Update (July 2025) by UNCTAD provides a comprehensive outlook on trade flows, sectoral shifts, and emerging regulatory battles shaping global commerce. Below is a detailed breakdown for stakeholders across Africa and the Global South.

Trade Performance: Growth Amid Fragility

In the first half of 2025, global trade expanded by an estimated US$300 billion, with goods contributing US$230 billion and services adding US$70 billion. Trade grew 1.5% in Q1 and is nowcast to rise by 2% in Q2, though much of the growth was price-driven as goods volumes increased only 1%.

Developed economies led this expansion. U.S. imports surged as firms rushed to secure supplies before new tariff hikes, while the European Union’s exports registered strong gains. In contrast, developing economies, South–South trade, and several Asian economies lagged behind, though African exports posted notable growth, driven by both intra-African and extra-regional trade.

Trade imbalances widened further, with the United States’ deficit ballooning and China and the EU recording growing surpluses. Bilateral gaps between the U.S. and China, as well as the U.S. and the EU, reached new highs.

Regional and Sectoral Highlights

• Regional Trends: Growth was strongest in Europe, North America, and Africa, while the Pacific and Central Asia contracted. South–South trade was mixed, declining when East Asia was excluded.
• Sectoral Shifts: Chemicals and pharmaceuticals drove Q1 growth, supported by global health and manufacturing demand. Communication equipment and energy products weakened, signaling softer tech and commodity cycles.
• Services: Global services trade expanded 9% year-on-year, with India, South Africa, and Brazil leading exports, while China, Japan, and the EU experienced quarterly declines.

Digital Economy and Big Tech Dominance

Seven of the world’s ten most valuable firms, including Microsoft, Apple, Amazon, Google, and Meta, control core digital markets spanning cloud computing, advertising, AI, and e-commerce. This consolidation threatens innovation, raises barriers for startups and MSMEs, and deepens the divide for developing economies lacking robust digital infrastructure.

Key concerns include:

• Advertising Dependency: Google and Meta derive over 75% and 97% of their revenues from advertising, amplifying their control over data and user access.
• Generative AI Control: Microsoft and Alphabet command 78% of AI-related digital traffic, leveraging partnerships with OpenAI and Anthropic.
• Market Power: Top five digital MNEs’ share of global sales jumped from 21% in 2017 to 48% in 2025, with assets concentrated similarly.

For Africa and the Global South, this dominance risks marginalization in the emerging AI and data-driven economy unless stronger regulatory and industrial strategies are pursued.

Policy and Competition Law Trends

Governments worldwide are escalating efforts to regulate Big Tech:

• The European Union’s Digital Markets Act (DMA) is inspiring similar laws in Brazil, India, Japan, Nigeria, South Africa, and the UK.
• Major fines in 2025: Apple (€500 million), Meta (€200 million), Google (Indonesia), Meta (Nigeria, $220 million), and Apple (Brazil) for practices like forced payment systems and exploitative privacy policies.
• Merger Scrutiny: Big Tech acquisitions dropped from 58 in 2019 to 22 in 2024 due to tougher oversight.
• Capacity Gaps: Enforcement remains weak in Africa and Latin America, where data access and regulatory capacity are limited.

Risks Ahead: Policy Shocks and Geoeconomic Tensions

The outlook for late 2025 remains uncertain. Risks include:

• U.S. Trade Policy: A 10% baseline tariff, sector-specific duties, and threats of retaliation over foreign regulations (including the EU’s DMA) could escalate trade conflicts.
• Slow Global Growth: Economic slowdowns threaten demand, particularly in Asia.
• Fragmentation of Supply Chains: Friendshoring and diversification continue, but nearshoring is declining, pointing to more complex, longer supply chains.
• China’s Manufacturing Weakness: A downturn in its Purchasing Managers’ Index signals softer global demand.

What It Means for the Global South

For African and developing economies, the July 2025 trade trends underline urgent priorities:

1. Boost Regional Integration: Strengthen AfCFTA-driven value chains to offset volatility in extra-regional trade.
2. Invest in Digital Infrastructure: Enable MSMEs to access and benefit from e-commerce and AI-driven opportunities.
3. Adopt Robust Competition Frameworks: Build capacity to regulate digital giants, drawing lessons from DMA-inspired policies.
4. Diversify Trade Partners and Sectors: Reduce dependence on a few markets by scaling intra-African trade and diversifying into growth sectors like pharmaceuticals and digital services.

Conclusion

Global trade remains resilient but fragile in 2025, buffeted by tariffs, tech monopolies, and slowing economies. For Africa and the Global South, the way forward lies in deepening regional trade, digital industrialization, and strengthening competition policy. Without these, developing economies risk being spectators rather than participants in the future of trade.

For full trade data and insights, visit UNCTAD’s Global Trade Update.