Global trade growth
Global trade growth started 2025 respectably, but challenges were mounting, as UNCTAD reported in March:
“In 2024, world trade saw record expansion to $33 trillion in 2024 – up 3.7% from 2023 – driven by developing economies and strong services trade. But looking ahead, new risks loom, including trade imbalances, evolving policies, and geopolitical tensions.”
Indeed, UNCTAD forecast global goods trade to decline slightly by Q1 2025 compared to the pre-pandemic levels of Q1 2019, whereas services trade was forecast to grow by much more than goods (see Figure 5.1).
Figure 5.1: Goods and services (Q1 2015 – Q4 2024)
In terms of current global trends and outlook, UNCTAD noted:
- “Supply chains diversify, not consolidate
- Near-shoring and friend-shoring trends reversed in 2024, as businesses moved beyond limiting trade to geopolitical allies or nearby regions. Instead of consolidating supply chains, firms are now diversifying trade networks across multiple regions to reduce risk – creating opportunities but adding complexity.
- Trade dependence is also shifting.
- Economies such as Russia, Vietnam, and India, have deepened trade ties with specific partners, while others, including Australia and the EU, are reducing reliance on traditional markets.
- The decline in trade concentration suggests that smaller economies are playing a bigger role
- Trade policies redraw the map which is contributing to uncertainty
- Governments are expanding tariffs, subsidies, and industrial policies, reshaping trade flows. The United States, European Union (EU) and others are increasingly tying trade measures to economic security and climate goals, while China is using stimulus policies to maintain export momentum.
- Rising protectionism (policies favouring domestic industries through tariffs or restrictions), particularly in advanced economies, is triggering retaliatory measures (countermeasures from trading partners in response to trade restrictions) and adding trade barriers.
- Meanwhile, industrial policies (long-term strategies to develop specific sectors) are reshaping key sectors like clean energy, technology and critical raw materials, risking competition distortion.
- Global trade imbalances widen
- In 2024, global trade imbalances returned to 2022 levels. The US trade deficit grew, China’s surplus expanded, while the EU shifted to surplus due to energy price changes.”
Source: UNCTAD, Global trade in 2025: Resilience under pressure, March 2025
Value of global trade
Global trade plays a key role in the economic health of developed nations and in growing the prosperity of developing nations. For its importance to the UK economy, please see “Why trade matters” in the section on economic context.
In 2024, global trade in goods and services was about US$ 33 trillion.
- Goods (merchandise) trade accounts for about US$ 25 trillion, roughly three quarters of the total, while services contribute the remaining US$ 8 trillion, or about one-quarter.
- Goods trade continues to be prominent in shaping the overall patterns of international commerce, even as services play an increasingly important role in the global economy.
However, as UNCTAD notes, international events have caused increasing volatility in volumes and inflation which has caused the value of global trade to fluctuate (see Figure 5.2). For example, Brexit was a contributing factor in 2019 due to uncertain trade negotiations between the UK and the EU.
Figure 5.2: Volatile trend in global trade volumes (2010 – 2024)
Source: UNCTAD, Key statistics and trends in international trade 2024, June 2025
Main players in global trade
The EU, China and the US dominate global trade in goods and services (see Table 5.1 and Figure 5.4) – trade is the sum of exports and imports. In 2024:
- EU (EUR 299 billion) and China (EUR 766 billion) both had trade surpluses and the US a trade deficit (EUR 823 billion) – Russia also had a trade surplus of EUR 154 billion;
- Due to their dominance, the EU27, the US, and increasingly China, have had a major influence over the standards that regulate world trade;
- UK ranked fourth, just ahead of Japan, with a small trade deficit of EUR19 billion.
Figure 5.4: Main players in world trade of goods and services (2024 – EUR bn)
See Table 5.1 for the detailed rankings:
- UK trade was €2.1 trillion, ranking above Japan and accounting for 4.2% of world trade.
- In terms of individual countries, the UK ranked:
- 5th for overall trade after the US, China, Germany (€3.8 trillion) and Netherlands (€2.1 trillion).
- 2nd for services trade after the US, level with China, and just ahead of Germany and Ireland.
- 11th for goods trade after China, US, Germany, Netherlands, Japan, France, Hong Kong, South Korea, Italy, Mexico, and just ahead of India and Canada.
Table 5.1: Main players in global trade of goods and services (2024)
First trade partners
Figure 5.5 shows the first trade partner in 2024 for trade of goods (merchandise) for each country:
- China is the first trade partner for India, Pakistan, Russia, Japan, Mongolia, Kazakhstan, Australasia, Indonesia, Saudi Arabia, Iran, about half of Africa, and most of South America.
- EU is the first trade partner for US, China, UK and about half of Africa.
- US is the first trade partner for the EU, Mexico, Canada, Central America, Colombia.
Figure 5.5: First trade partner for trade in goods (2024)
Source: European Commission, DG Trade Statistical Guide, August 2025
Shares of global trade – trend
For trends in shares of world trade for EU27, China, Japan, UK and US from 2014 to 2024, see Figure 5.6:
- EU (excluding intra-EU trade) has had the top share in each year but its share over the last few years has been declining gently and was 15.8% in 2024.
- China’s share has grown consistently but has flattened in the last three years to 13.4%.
- US increased its share between up to 2016, then declined gradually until 2021 before rising to 13.6% in 2024.
- UK’s share was 4.6% in 2014, declining to 4.2% in 2024.
- Japan gradually declined more than the UK from a 4.7% share in 2014 to 3.6% in 2024.
Figure 5.6: Trends in share of global trade for EU, US, China and Japan (2014-2024)
Source: European Commission, DG Trade Statistical Guide, August 2025
Trade openness – trend
Most economies depend on trade with other nations. To assess ‘trade openness’ (or ‘trade intensity’) economists use the ratio of trade to GDP. The measure indicates how integrated a country is with the world economy. Trade openness tends to be higher in developing nations and lower for larger economies.
The global average ratio of trade to GDP for 2024 was 57%, slightly down from 58% in 2014.
Figure 5.7 shows the trend in trade openness for EU27, China, Japan, UK and US from 2014 to 2024.
- The UK had the highest trade openness throughout the period but it has been volatile. From 59.8% in 2014., it rose in 2019 to 64%, and, after a Covid decline, rose further to 70.2% in 2022 before dropping to 66.6% in 2024.
- By 2024, the EU’s trade openness had risen to 46%, ahead of the US, Japan and China.
- China’s trade openness had declined from 47.1% in 2014 to 34.6% by 2024 as its economy has grown and domestic consumption of domestic products has increased.
- Japan started at 38% in 2014 and followed a volatile path to arrive at 42.5% by 2024.
- The US economy has been the least open to trade and its openness declined slowly from 29.7% in 2014 to 26.4% in 2024.
Figure 5.7: Trend in trade openness (2014 – 2024)
