Growth in trade this year has defied expectations of many economists, who projected a slowdown resulting from increases in US tariffs. The Trade and Development Chart shows that globally, the volume of goods trade expanded by 5.0 percent in the first seven months of this year compared with the same period of 2024, far exceeding projections made earlier in 2025 by several institutions. Among developing countries, goods trade increased by 6.2 percent in the first seven months of this year compared with the same period of 2024.
Among the possible reasons for the difference:
- Companies along the supply chain in early 2025 rushed to complete transactions before tariff increases took effect.
- Companies avoided passing the costs of tariffs on to consumers for fear of losing sales. Instead, many are cutting costs by adjusting production technologies and improving productivity, offering fewer varieties, reducing waste, and shifting suppliers.
- Relatively large sectors were exempt from tariffs, including energy and critical minerals, and consumer electronics; products covered by the USMCA are also exempt.
- Companies have been pulling from a more diverse range of suppliers, which adds complexity but can help stabilize trade volumes.
For analysis of the latest global trade trends, see the Trade Watch.
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