Global Trade Dynamics

➡️ Tariffs didn’t break global trade; they reshaped it. Trade volumes are holding up, despite initial concerns. And an undeniable surge in South-South commerce signals a fundamental shift away from traditional East-West trade corridors—demanding a fresh look at global supply chains and the evolving balance of power. China’s trade relationship with the Global South is expanding significantly. Chinese exports to developing markets presently surpass those to the U.S. and Europe, backed by strategic infrastructure investments. This dynamic is fueling more than just sales: it’s creating lasting dependencies and reshaping the competitive landscape for European companies, with potential negative credit implications for key manufacturing sectors where EU trade flows have reversed to favor China. The European Union faces the challenge of altering its trade and industrial policies to reflect these changing global trade patterns. The recent Economic Security Doctrine, designed to protect the bloc’s independence from external disruptions, highlights a growing awareness of the need for greater resilience—but the effectiveness of these measures will depend on Europe’s ability to balance openness to trade with safeguarding strategic interests and addressing internal economic challenges. ➡️ In S&P Global Ratings' latest edition of #CreditWeek, our subject matter specialists Izabela Listowska, Paul Watters, and Barbara Castellano explore how the shifting tides of global trade are challenging Europe. Read the full edition below, and subscribe to receive our forward-looking insights on emerging and established credit risks every Thursday.

🌍 From globalization to power rivalries: why the global economy is being restructured In my recent presentations to international executive committees, I have insisted on a point that forecasting models failed to capture: the unexpected global power shifts. Unlike innovation, AI, or demographic aging, trends that could be integrated into forecast models, the U.S./China rivalry is reshaping the world economy. This transition generates uncertainty, which is not quantifiable like traditional risk. We are moving from an open global trading system toward a world defined by sovereignty-based economic models. 👉 My analysis highlights three major consequences: 1️⃣ Global power shifts. The U.S. has regained economic momentum through tax cuts, fiscal stimulus, and massive investment in innovation. Structural GDP growth has risen by more than 35% since 2010 and 13% since 2019, outpacing current GDP growth. This reflects stronger productivity, higher wages and more robust consumption. At the same time, China has upgraded its technological capabilities and built an Asian growth pole, notably through Made in China 2025. Economic power is once again a direct source of political power. These dynamics, absent from traditional models, have also triggered rising public and private investment, consumption subsidies, and industrial policies with direct implications for corporate strategies. 2️⃣ The restructuring of trade flows. The “China+1” strategy reduces U.S. reliance on Chinese imports while increasing trade with other Asian countries and Mexico. Europe risks structural decoupling: higher energy costs, lagging investment, and rising imports of Chinese overcapacity in EVs, batteries, and solar panels. Reciprocal tariffs and rules of origin force companies to rethink global supply chains. 3️⃣ The deeper U.S. strategy for 2025. Beyond tariffs, the U.S. seeks to reclaim industrial leadership from China, prioritizing production over short-term consumption. Higher tariffs drive inflation, constrain spending, and alter capital flows. Economic policy uncertainty has quadrupled since 2001, reinforcing unpredictability in global markets. If the U.S. succeeds in reducing its external deficit through rising U.S. household demand for Treasuries, global effective demand could be revised downward. 🎯 What does this mean for global companies? ▶️ U.S. households may no longer be the sole anchor of global demand. ▶️ Asian regionalism will continue to drive structural growth. ▶️ Europe risks stagnant GDP growth and widening inequalities unless it addresses competitiveness gaps. ▶️ Emerging economies will define new models of consumption for their populations and, in doing so, the geography of global demand. My role as an economist is to equip leaders with analytical tools to navigate this changing landscape, where power rivalries rewrite the rules in real time.

The recently published United Nations Conference on Trade and Development (#UNCTAD) Trade Update Report presents a nuanced assessment of #global #trade dynamics at a historic moment in #society. Global trade is projected to exceed USD 35 trillion, yet its growth trajectory is moderating amid tighter financial conditions, subdued demand, and heightened geopolitical uncertainty. The report underscores that trade fragmentation has become structural rather than cyclical, driven by the proliferation of #tariffs, non-tariff barriers, export controls, and industrial #policy interventions. These measures are reshaping global value chains, accelerating trends toward diversification, near-shoring, and friend-shoring, as firms and governments seek #resilience over cost optimization. Services trade continues to outperform goods trade, supported by digitalization and the expansion of cross-border data-enabled services, while South–South trade is gaining strategic importance as emerging economies assume a larger role in global commerce. At the same time, environmental and #climate-linked trade instruments—such as #carbon pricing mechanisms and sustainability standards—are beginning to materially affect competitiveness, market access, and compliance costs, particularly for developing economies. The report highlights that policy uncertainty has become a critical constraint on investment and long-term planning, disproportionately affecting least developed countries with narrow export bases. UN Trade and Development (UNCTAD) emphasizes that the current trajectory risks entrenching asymmetries between advanced and developing economies unless coordinated, inclusive trade governance mechanisms are strengthened. In my view, these trends are redefining geopolitics and power relations, as trade and tariffs evolve into primary instruments of #diplomacy and strategic leverage. Economic partnerships increasingly reflect geopolitical calculus, exemplified by pragmatic arrangements such as the #Canada #China sectoral cooperation and the comprehensive European Union #India soon-to-be-announced agreement. By 2030 and 2050, demographic shifts and #technology acceleration will further reconfigure alliances, elevate emerging #markets, revise #strategy, and embed trade policy at the core of global #power and economic #governance.

Given the substantial changes in U.S. trade policy and ongoing geopolitical volatility, the latest update of the DHL Global Connectedness Tracker – a research report we published with our partners at NYU Stern School of Business – provides a systematic overview on how recent developments, like rising #tariffs or trade conflicts, are influencing #globaltrade. And for some, the results might be surprising: in the first half of 2025, global trade grew faster than in any half-year since 2010 – except during the temporary rebound following the COVID-19 pandemic. Although recent forecasts have been lowered, global trade is still expected to grow at about the same pace as it did over the past decade – even as trade flows between the U.S. and China have decreased. And contrary to popular belief, trade is not turning inward – goods are traveling farther than ever. As we have also seen in recent months, China’s trade with the rest of the world is a key driver of this development – with its trade with Africa and Southeast Asia expanding rapidly. For us at DHL, these insights are crucial to steer investments and ensure we can provide capacity where our customers need it. The findings of the report can also help businesses identify new global opportunities and customers – underscoring DHL’s role as a trusted partner in connecting markets and enabling growth. I encourage you to use this data-driven report to look beyond the headlines: global trade might be shifting, but it is still growing. https://lnkd.in/ek6cCcfV

We are witnessing the most profound change to the global economic order since World War II. As the global trade order fragments, governments and businesses must reorient away from unbridled free trade and toward a world with both prosperous trade and economic security. Doing so presents a number of seeming contradictions. We must reconcile our defense, economic security, and climate imperatives with the undeniable reality of global value chains. To embrace autarky would be to depress innovation, prosperity, and - ultimately - security. National economies will, and should, continue to operate within and across global value chains of production. And yet trade must be remade to be secure, fair, and compliant. To manage global trade then in this new paradigm, trade processes must be rebuilt to manage global value chains — and not merely shipments crossing borders. We must illuminate and manage these value chains as active, connected, trusted networks of production — from raw materials to finished goods. To manage trusted value chains, governments and businesses must share, connect, and process data across borders and parties in order to illuminate and govern these networks. However, this coordination and information sharing across parties must be reconciled with the dual imperatives of data sovereignty, data security, and intellectual property protection. This new era of global trade is one of tension and contradictions. New technologies and new operating models are necessary to reconcile these tensions — to preserve the many benefits of global trade while correcting the side effects and abuses. China, meanwhile, has been advancing for years a state-led technology stack and data processing system across a growing network of customs authorities and logistics operations with the power to map and manage global trade. This is a tectonic initiative with the potential to advance state aims and greatly influence global commerce. At Altana we have launched the Future of Trade Forum, a periodical publication dedicated to exploring trends, forces, and ideas for reshaping trade. In this inaugural report, we examine the rise of China’s digital trade network. https://lnkd.in/eVxUm87z

As businesses navigate the ever-changing landscape of US tariffs, what is the medium-term picture that might emerge? How might global trade look when the dust settles? One thing is clear—we are not going back to the globalization model we had so far. Beyond that, we see four potential scenarios shaping the future of global trade. After the effects of dramatic shifts in tariff rates and trade policies become clearer, the global business environment in 2026 and 2027 could take several forms. To help companies prepare, we have outlined four scenarios:    - Global Managed Trade  - North American Stronghold  - Multipolar Escalation  - Self-Sufficiency Each scenario is stress-tested across five dimensions—trade flows, financial markets, technology and innovation, corporate strategy, and the role of international institutions. In a time of strategic ambiguity, foresight is a powerful edge. https://lnkd.in/gd2Q2NdK  #GlobalTrade #Geopolitics #Resilience #ScenarioPlanning

🌍 Unveiling the Hidden 15%: How Mirror Data is Bridging the Global Trade Gap Did you know that 15% of global trade—an estimated $4.8 trillion—goes unreported due to non-disclosure or delays by countries like Russia, Ecuador, and Taiwan? This creates significant blind spots for businesses, policymakers, and researchers trying to track critical trade trends. The solution? Mirror Data. By analyzing import records from transparent countries like the U.S., China, and Brazil, we can infer missing export data from non-reporting nations. 🔍 Real-World Insights: - Russia’s Natural Gas: After halting trade disclosures in 2022, mirror data revealed a 70% drop in Russia’s gas exports by 2024, based on European and Chinese import records. - Angolan Oil: Despite reporting delays, mirror data uncovered that Angola exported 275 million barrels of oil in 2024, valued at $25.5 billion. - Cobalt Supply: Africa exported 170,000 metric tons of cobalt in 2024, representing 74% of global supply. Mirror data revealed a 17% year-over-year increase in exports. 📈 The Bigger Picture: - Supply Chain Resilience: Mirror data helps companies anticipate disruptions by tracking partner imports. - Market Insights: Investors can better analyze emerging markets with incomplete or delayed data. - Policy-Making: Governments can detect trade imbalances and illicit activities, enabling informed policy decisions. The Observatory of Economic Complexity (OEC) has increased global trade data coverage from 60% to 85%, offering a clearer view of global commerce. Mirror data continues to unlock valuable insights, empowering businesses and governments to make data-driven decisions, even in opaque markets. 💡 Want to learn more about how mirror data is transforming global trade analysis? Check out the full article: Bridging the Global Trade Data Gap with Mirror Data How are you leveraging data to navigate uncertainties in your industry? Let’s connect and discuss! 🔗 https://lnkd.in/giKtjXWt #GlobalTrade #MirrorData #DataTransparency #SupplyChainManagement #BusinessIntelligence #EconomicInsights #OEC #MarketAnalysis #TradeData #DataDrivenDecisions

One thing that has always intrigued me is the widespread confusion between preference "eligibility" and actual preference "utilization". Many assume that once a free trade agreement or preferential scheme is put in place, traders will automatically reap the benefits. The reality is far more complex. Traders often encounter compliance challenges, or find that the preference margin doesn’t justify the additional red tape, leading them to opt for the most-favoured nation (MFN) tariff instead. With more than 600 regional trade agreements in place, this raises a crucial question: What share of global trade still takes place under the MFN conditions by the World Trade Organization? I am sure that the answer will surprise you. But before I tell you why, let me clarify that calculating this with precision—down to the national tariff level—is a number crunchers' nightmare. The challenges include limited data availability and the sheer scale of information involved. Yet ,my colleagues Tomasz Gonciarz and Thomas Verbeet rose to the occasion and produced a fascinating Staff Working Paper which dives into this intricate topic that was published yesterday (link in comments). Among the many fascinating insights is the chart below, illustrating how broad sectors of world trade utilize preferential schemes. For example, preferences seem to be proportionally very important for sectors like fruits &vegetables, transport equipment, and clothing and textiles, but not so much for other sectors. Key Insights: 1️⃣ Despite the proliferation of trade agreements, over 80% of international merchandise trade still takes place under MFN conditions, underscoring the enduring significance of WTO rules; about half of world trade takes place in MFN-duty free tariffs lines (i.e. pay no tariff). 2️⃣ While 22% of global trade is eligible for preferential tariffs, only 17% effectively benefits. Factors such as complex rules of origin, administrative burdens, or a business decision not to change the supply chain in order to comply with the rules contribute to this underutilization. 3️⃣ Trade remedies like anti-dumping and countervailing duties modestly impact global trade as a whole, affecting only 1.3% and 0.6% of global imports, respectively, though they can be quite significant in certain sectors (just think of steel and other metals...). 4️⃣ Bilateral tariff measures between the United States and China affect a significant share of their trade flows, but account for just 1.9% of global imports. Are you surprised by any of these numbers? What’s your perspective? Will MFN remain the MVP of global trade? #Economy #Economics #TradePolicy #WTO #MFN #GlobalEconomy #Tariffs #Customs #InternationalTrade #Tradenerd

🌍 Between fragmentation and friendshoring, how are exporters scrambling to adapt to the trade war? Today, we’re unveiling the 2025 Allianz Trade Global Survey, capturing the voices of 4,500 exporters across 9 countries that account for close to 60% of global GDP before and after the April 2 US tariff announcements. The message is clear: uncertainty and fragmentation are structural. Global trade is being reshaped in real time and exporters are navigating disruption at full speed. The shockwaves have exposed the vulnerability of companies with highly concentrated supply chains and export markets. ✓ 60% expect a negative impact from the trade war and 45% expect export turnover to decline ✓ Export growth expectations dropped from 80% to 40%, with USD305bn in export losses at stake this year ✓ Payment delays and non-payment risks on the rise: 25% anticipate payment terms longer by more than 7 days (+13pps) and 48% expect increased credit risk But companies are not standing still - having navigated successive shocks since 2020, they are diversifying partners and markets, reconfiguring logistics, and embedding risk-sharing across the value chain. In this trade environment, success depends increasingly on adaptability. Congratulations to Ana BOATA, Ano Kuhanathan, Ph.D., Françoise Huang, Dr. Jasmin Gröschl, Lluís Dalmau Taulés, Maxime Lemerle and the entire economic research team on the publication of the Global Survey! You can read all the findings here: https://lnkd.in/dC4vAgVc

Last week, alongside Professor Steven Altman, I had the pleasure of participating in a press event promoting the most recent DHL Global Connectedness Report, prepared in collaboration with NYU Stern School of Business. The report has unveiled a remarkable revelation: Globalization achieved an unprecedented peak in 2022 and has sustained near that level into 2023. This is a testament to the resilience and adaptability of our interconnected world. Globalization and global trade is not only alive, it's thriving and the world is actually becoming more connected than ever.   The report isn't merely an analysis, it's a unique perspective on the world's ever-intensifying interconnectivity. It's crucial for businesses navigating the global landscape to understand these trends.   Here are some encouraging insights from the Americas region:   1. Since 2016, while there has been a decrease in the involvement of China in U.S. trade, capital, information, and people flows, as well as the reciprocal involvement of the U.S. in China's flows, the level of trade between the two countries remains high.   2. North America stands out as the sole major world region experiencing a discernible and consistent rise in the proportion of trade conducted within the region, a phenomenon often associated with #nearshoring .   3. Mexico plays a pivotal role in connecting both global and regional supply chains. It imports goods over extended distances while exporting over shorter ones, resulting in the most significant variance among all major economies in the distances traveled by its exports and imports.   Let's keep the conversation going – how can we leverage this growing interconnectedness to build a more prosperous and sustainable future? Download the report here: https://lnkd.in/dGtPvvv3   #DHLGlobalConnectedness #Globalization #Logistics #SupplyChain #Trade