Global trade value in 2025 is likely to surpass the $35 trillion mark for the first time, a 7% increase compared to the previous year.

The year 2025 was once touted as the point at which international trade would collapse. The tariffs imposed by US President Donald Trump were described as unprecedented in scale and ambition, potentially halting the process of globalization. However, as we enter 2026, the actual figures do not reflect that scenario.

According to the latest data from the United Nations Conference on Trade and Development (UNCTAD), global trade value in 2025 is likely to surpass $35 trillion for the first time, a 7% increase from the previous year. The White House can impose tariffs on trade, but cannot completely shut it down. Of course, tariffs still have a certain impact. The first half of 2025 saw a surge in goods hoarding, as importers accelerated orders to avoid the risk of increased tariffs. This gave many the impression that businesses were rushing to get goods across borders before opportunities narrowed due to policy decisions.

But the trade picture is more than that. This is no longer the 1930s, and goods are not the only channel for creating cross-border value. Trade in services has increased by 9% in the past year. The global economy is “dematerializing” at a much faster rate than traditional trade policies can adjust. You can block the import of washing machines or steel at a port, but it will be much harder to prevent businesses from buying cloud computing services or chip design from abroad.

Even goods trade can be affected in less intuitive ways when tariffs rise. Making it harder to buy and sell sometimes leads to higher prices. In the first six months of 2025, prices of many internationally traded commodities rose sharply, likely reflecting the uncertainty caused by Trump's tariff policies.

Overall, even if the volume of physical goods crossing the border decreases, the total value of those transactions could still increase. This could happen if the U.S. returns to producing simple items domestically, such as T-shirts, but continues to import increasingly more intermediate components and high-value machinery.

Trade policies may reverse, but technology only advances. Given the potential leap forward offered by artificial intelligence, no country can afford to remain completely uninvolved. Global demand for metals from Africa, semiconductors from Taiwan (China), or gas turbines for data centers from Japan will continue to rise.

When production is widely dispersed and demand remains strong, countries find it difficult to completely block imports. At most, they can only shift bottlenecks and high costs from one stage to another in the supply chain. In most cases, domestic costs will increase, while some "reliable" partners will still benefit. This explains why, despite South Korea facing numerous challenges from US tariff and investment requirements, its exports could still surpass $700 billion for the first time in 2025. Taiwan estimates its trade will increase by 7.37% in 2025, the fastest growth rate in 15 years.

Predictions about the decline of global trade have clearly overlooked the role of services, technology, and how value is created and distributed within global supply chains. But the most crucial factor they haven't considered is people. Entrepreneurs are always finding ways to make money, and manufacturers are always finding ways to sell. Much of the resources previously focused on reducing reliance on Chinese suppliers in recent years are now shifting toward mitigating risks from American buyers. The search for sustainable supply chains is gradually giving way to efforts to find reliable consumer markets. UNCTAD reports that trade between developing countries is growing faster than the global average, while intra-regional trade in East Asia increased by 10% year-on-year.

The U.S. remains a large and irreplaceable consumer market. However, the impact of its trade barriers will not be uniform across countries and industries. For some, job losses and contract damages will be a severe blow. But most will seek to diversify, turning to other export markets, or finding indirect ways to access the U.S. market.

UNCTAD suggests that the full impact of the "bumps in the gears" of globalization may only truly become apparent in 2026, while warning of the risk of slowing growth. 2026 may present challenging periods, but the lessons of 2025 will not be easily forgotten. The world economy has proven far more resilient than anticipated, and the forces binding economies together are stronger than any rigid policy. New trade models, based on regional integration, cross-border services, and technological transformation, will undoubtedly continue to emerge.

Source: VTV

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