China and India outpaced global trade growth in 2024, outperforming international averages, according to a report citing UN Trade and Development (UNCTAD)’s Global Trade Update. The report highlighted that while both nations excelled in trade performance, concerns about rising deficits and evolving trade strategies could introduce new risks in 2025.
The report noted that the widening trade deficits of the US and EU with China, alongside India’s increasing deficit with Russia due to shifting energy trade patterns, could lead to fresh tariffs, restrictions, or investment shifts, heightening economic uncertainty.
UNCTAD warned that despite resilience in global trade, this strength may come under pressure in 2025. The organization emphasized that fostering global cooperation and adopting balanced policies would be crucial to mitigating economic fragmentation and ensuring sustained growth.
Protectionist measures and changing trade strategies are emerging as key risks, the report added. While services trade remains robust, goods trade faces growing uncertainty. Governments are increasingly relying on tariffs, subsidies, and industrial policies, reshaping global trade flows.
The report further observed that rising protectionism, particularly in advanced economies, is prompting retaliatory measures, including countermeasures from trading partners and additional trade barriers.
Global trade expanded to a record $33 trillion in 2024, reflecting a 3.7% increase from 2023, largely driven by developing economies and robust services trade. However, the report warned that looming risks, including trade imbalances, evolving policies, and geopolitical tensions, could impact future growth.
Trade dependence is also undergoing significant shifts. Economies such as Russia, Vietnam, and India have strengthened trade ties with specific partners, while countries like Australia and the EU are actively reducing reliance on traditional markets.
In 2024, developing economies outperformed developed nations in trade growth, with imports and exports rising by 4% for the year and 2% in the fourth quarter, driven largely by East and South Asia. South-South trade expanded by 5% annually and 4% in the final quarter. Conversely, trade activity in Russia, South Africa, and Brazil remained sluggish for much of the year, with only slight improvements seen in the fourth quarter.
Industrial policies are increasingly shaping key sectors such as clean energy, technology, and critical raw materials, raising concerns about distorted competition.
In 2024, global trade imbalances returned to 2022 levels. The US trade deficit widened, China’s surplus grew, and the EU shifted to a surplus position amid energy price changes.
As global trade uncertainty rises, UNCTAD stressed that cooperation and balanced policies will be essential to safeguarding long-term growth. While China’s economic stimulus measures and lower inflation in select regions may support trade, protectionism and policy shifts in major economies pose significant risks.
The report cautioned that in 2025, preventing global fragmentation—where nations form isolated trade blocs—will be critical. Managing policy shifts without jeopardizing long-term growth will require strategic actions from both governments and businesses.
