Business EconomyPosted at: Mar 15 2025 4:24PM


US policies, geopolitical tensions pose risk to global trade in 2025: UNCTAD

New Delhi, Mar 15 (UNI) Global economic activity is expected to maintain modest momentum in 2025 but international trade faces significant uncertainty with factors such as a shift in US trade policies, global trade imbalances and geopolitical challenges negatively impacting trade growth, UN Trade and Development (UNCTAD) has said in its latest Global Trade Update.
"Moreover, the possibility of trade policy escalations casts a shadow of uncertainty over the global trade outlook for 2025," it said.
The report said that the expected easing in global inflation and China’s economic stimulus for 2025 — with a growth target of about 5 per cent— may provide some tailwind to global trade.
The Global Trade Update noted the growing trend in the implementation of protectionist trade policies, with a growing tendency to link trade measures with non-trade policy objectives.
"This shift is evident in the implementation of broad new tariffs targeting specific countries, as well as more targeted tariffs affecting particular products, such as steel and aluminium. These tariffs are expected to have significant repercussions on global and regional value chains," it said.
The report said that unilateral and highly restrictive trade policies can set off ripple effects, and such measures frequently prompt retaliatory actions from affected trading partners, often creating a cycle of escalating trade barriers which may eventually involve also third parties.
The report highlighted that there has been a noticeable reduction in demand for container shipping in the first months of 2025 as reflected by a significant decrease in the Shanghai Containerized Freight Index (SCFI).
"The decline in the SCFI points to weaker trade volumes, signalling a slowdown in global economic activity. Additionally, the Baltic Dry Index, which tracks shipping rates for bulk commodities such as coal, iron ore, and grain, remains at relatively low levels compared to 2024," it said.
As per UNCTAD, global trade expanded by nearly US$1.2 trillion in 2024, reaching US$33 trillion — a result of a 9% rise in services trade and a 2% increase in goods trade.
While developing nations, particularly China and India saw better than average trade expansion during 2024, many developed nations experienced trade contractions.
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