BCG forecasts that by 2034, global trade will continue to grow but will undergo deep restructuring, forming a fragmented order centered around four major economic poles.

Global trade over the next decade is likely to remain remarkably resilient, but will undergo a profound restructuring towards polarization, with four major economic centers playing a dominant role. This assessment is stated in the report "Trade in Transition: Preparing for a Fragmented World Order" published by the Boston Consulting Group (BCG).

According to the report, the most likely scenario by 2034 is that the world of trade will be organized around four main poles: the United States, China, the group of countries following the "flexible multilateralism" trend (including the European Union, Canada, Japan, Mexico, Peru, and Viet Nam), and the expanded BRICS economies, excluding China.

Despite geopolitical tensions and the increasing trend of trade barriers, BCG forecasts that total global trade will still grow from approximately $23 trillion in 2024 to nearly $30 trillion in 2034, equivalent to an average annual increase of about 2.5%, slightly higher than the global GDP growth rate.

According to the BCG report, the key factor sustaining this momentum is that the majority of countries continue to respect existing trade agreements and the rules of the World Trade Organization (WTO), which still govern more than 70% of global trade flows.

However, BCG emphasizes that trade routes will change dramatically. The US role in global goods trade is projected to decline, as Washington prioritizes narrowing the trade deficit and boosting domestic production. US trade growth is estimated at only about 1.5% per year due to the "America First" policy and the expansion of tariffs. The report notes that the percentage of US imports subject to tariffs has increased from 13% to 61% since January 2025.

Conversely, China is projected to solidify its position as the leading trading partner for many countries in the Southern Hemisphere. China's merchandise trade is forecast to grow more than 40% faster than that of the US, with particularly high growth in trade with the expanding BRICS countries, driven by increasing demand for energy, food, industrial inputs, and the search for new markets for finished goods.

Meanwhile, the group of countries following a flexible multilateral approach is projected to strengthen trade relations with Southern Hemisphere economies, with an average increase of around 3% per year over the next decade. This trend is driven by a shared commitment to international trade norms and efforts to diversify supply chains, reducing dependence on both the US and China.

The BCG report suggests that the global trade landscape over the next decade will not collapse but is shifting to a new, more fragmented yet flexible structure, in which middle- and developing economies, particularly in the Southern Hemisphere, will increasingly play a significant role in shaping international trade flows.

Source: VTV

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