Strong trade volume growth has been recorded by the World Trade Organization for the first few months of 2025 but this surge is thought to be connected to importers’ desire to avoid higher Trump Tariffs by bringing forward goods purchases.
“If so, trade growth should slow later in the year as sellers draw down inventories rather than [import] more goods,” the WTO says in its latest Goods Trade Barometer, a composite leading indicator for world merchandise trade.
Although many of the component indices still look strong, including air freight at 104.3 index points and box shipping at 107.1 index points, a more bearish view bolstered by the most predictive barometer component, the “new export orders index,” which has contracted. That would tend to signal a future weakening in global trade and manufacturing.
The WTO notes that the current reading of the Barometer is 103.5 index points, which is both above the quarterly trade volume index and is also above the previous reading of 102.8 points.
Growth in trade has been given a shot in the arm by falling inflation and lower interest rates, both of which have boosted real incomes and consumption.
However, other analysis by the WTO indicates a future decline of negative -0.2% driven by higher tariffs and rising trade policy uncertainty. Trade contraction is possible if U.S. reciprocal tariffs (which are due on 08 July 2025) are reinstated, or if trade policy uncertainty spreads.
