Global Trade at Record $33 trillion!

Global trade hit a record $33 trillion in 2024, expanding 3.7% ($1.2 trillion), according to the latest Global Trade Update by UN Trade and Development (UNCTAD), which warns that while trade remains strong, uncertainty looms in 2025. 

Services drove growth, rising 9% for the year and adding $700 billion – nearly 60% of the total growth. Trade in goods grew 2%, contributing $500 billion. Most regions saw growth, except for Europe and Central Asia. Growth varied by industry – agri-food, communication technology and transport saw gains, while energy, apparel and extractives slowed due to weaker demand and policy shifts. However, momentum slowed in the second half of the year. In the fourth quarter, trade in goods grew by less than 0.5%, and services edged up just 1%.

 

Trade inflation neared zero as prices for traded goods stabilized in the last quarter of 2024. The lingering effects of high post-pandemic inflation appear to have run their course.

 

 

In 2024, developing economies outpaced developed nations, with imports and exports rising 4% for the year and 2% in the fourth quarter, driven mainly by East and South Asia. South-South trade expanded 5% annually and 4% in the last quarter.

China and India outperformed global trade averages. In contrast, trade in the Russian Federation, South Africa, and Brazil remained sluggish. Meanwhile, developed economies’ trade stagnated, with imports and exports flat for the year and down 2% in the last quarter.

 

 

In 2024, global trade imbalances returned to 2022 levels. The US trade deficit with China reached -$355 billion, widening by $14 billion in the fourth quarter, while its deficit with the European Union (EU) increased by $12 billion to -$241 billion. Meanwhile, China’s strong exports pushed its trade surplus to the highest level since 2022. The EU reversed previous deficits and posted a trade surplus for the year.

 

Trade has remained stable in early 2025, but mounting geoeconomic tensions, protectionist policies and trade disputes signal likely disruptions ahead. Falling shipping indexes signal weaker demand for manufactured goods, inputs and commodities as businesses adjust to increasing uncertainty.

 

The challenge in 2025 is to prevent global fragmentation – where nations form isolated trade blocs – while managing policy shifts without undermining long-term growth.

 

Against the above backdrop, the US is “misbehaving” under Trump. Anyone with basics in international trade will tell you that it is the current account balance (of a nation) that matters.

The US has surplus with most nations including Malaysia on its services account. So, what’s this about? A “Trumpian” nightmare. This guy over the last 45 years has not understood trade – it is goods and services! Until he or his advisors get a hold of this, we are in for a Rough Ride (and that’s not a brand name for a cigarette!).

 

Reference:

Global trade hits record $33 trillion in 2024, driven by services and developing economies, UNCTAD,14 March 2025