Global goods trade experienced a robust start to 2025, buoyed by importers accelerating purchases in anticipation of higher tariffs. However, a significant dip in new export orders suggests this positive momentum is unlikely to persist, pointing to a slowdown in trade growth later in the year, according to the latest World Trade Organization (WTO) Goods Trade Barometer.
The composite leading indicator, which provides real-time insights into merchandise trade trends, rose to 103.5 in June, up from 102.8 in March. A value above 100 indicates above-trend trade volumes. While the current reading signifies strong activity, the forward-looking new export orders index, a key predictive component, fell to 97.9, moving into contraction territory and signaling weaker trade growth in the coming months.
This frontloading effect, where enterprises import more before tariffs take effect, is temporary. The decline in export orders, combined with the eventual drawing down of accumulated inventories, suggests that trade volumes are likely to moderate.
While new export orders have dipped, most other barometer components remain above trend. Indices related to transport, such as air freight (104.3) and container shipping (107.1), reflect increased movement of goods. The automotive products index (105.3) also shows robust performance due to resilient production and sales. Electronic components (102.0) have climbed above trend after underperforming in 2023 and 2024. The raw materials index (100.8) shows only modest growth.
World merchandise trade volume growth moderated in the final quarter of 2024 but is projected to rebound in the first quarter of 2025, consistent with the initial barometer reading and preliminary trade data. The WTO Secretariat’s Global Trade Outlook and Statistics report, released on 16 April 2025, initially projected stable trade growth of 2.7% for 2025 under a low-tariff scenario.
However, subsequent developments, including US-China and US-UK trade agreements alongside new tariffs on steel and aluminum, have led to slight adjustments. The overall outlook now stands at a marginal 0.1% growth, with the potential for trade contraction if factors like US reciprocal tariffs are reinstated or if trade policy uncertainty spreads globally.
The WTO will continue to monitor global trade developments closely and will provide further updates as new data becomes available.
