Key Points
- Record trade values are driven by services and technology rather than broad industrial recovery.
- Frontloaded exports have inflated short-term data while weakening future demand.
- Rising costs and tariff pressures are compressing corporate margins.
- Supply chain fragmentation is increasing uncertainty and operational risk.
Record Trade Growth Driven by Timing and Structure
According to United Nations Conference on Trade and Development (UNCTAD) estimates, global trade is expected to surpass 35 trillion US dollars in 2025 for the first time. However, this growth is uneven. Much of the expansion comes from services trade and AI-related electronics, while traditional manufacturing sectors remain weak.
In addition, trade volumes surged in early 2025 as companies in North America and other regions rushed to ship goods ahead of potential tariff increases. This frontloading effect pulled demand forward, creating strong short-term data at the expense of future orders. As a result, many firms now face a slowdown in the second half of the year.
Rising Costs Are Eroding Corporate Profits
Despite higher trade volumes, corporate profitability has come under pressure. Geopolitical tensions have driven up shipping costs, financing expenses, and compliance requirements. At the same time, a growing number of tariff measures in 2025 have forced companies to absorb higher costs rather than pass them on to customers.
Several key industries illustrate this strain. Global automotive trade declined by around four percent, while energy and solar-related trade weakened due to falling fossil fuel demand and reduced activity in critical minerals. For firms operating in these sectors, the global trade boom feels distant and abstract.
Fragmented Supply Chains and Weaker Expectations
Another source of pressure comes from structural changes in global supply chains. Friendshoring and nearshoring have accelerated in 2025, redirecting trade toward politically aligned partners. While these shifts reduce geopolitical risk, they also increase costs and disrupt previously efficient production networks.
At the same time, expectations for future growth have weakened. Although the World Trade Organization raised its outlook for 2025, it sharply lowered its forecast for global goods trade growth in 2026 to just 0.5 percent. This has led companies to delay investment, slow hiring, and prioritize liquidity over expansion.
Uneven Regional Experiences of Trade
Business sentiment varies widely by region. Parts of Asia and Africa continue to see relatively strong performance, with East Asia maintaining export momentum. In contrast, North America is expected to see significant declines in both imports and exports, leaving firms dependent on traditional goods trade under the greatest pressure.
These regional disparities reinforce the sense that global trade growth is becoming more concentrated and less inclusive.
Conclusion
The record trade figures of 2025 reflect resilience at the macro level, but they also mask growing stress at the micro level. Higher costs, thinner margins, and structural uncertainty have reshaped how businesses experience global trade. As trade policy uncertainty intensifies, headline growth alone is no longer enough to restore confidence. For many companies, survival rather than expansion has become the central concern.