Global goods trade saw a notable increase in the first quarter of 2025, according to the latest report from the World Trade Organization (WTO). The rise was largely attributed to importers accelerating purchases in anticipation of higher tariffs later in the year. Despite the current upswing, a decline in export orders has raised concerns that trade momentum may slow in the coming months. The WTO’s Goods Trade Barometer, a composite leading indicator for global merchandise trade, rose to 103.5 in June, up from 102.8 in March.
A reading above 100 suggests that trade volumes are performing above trend, while figures below 100 indicate weaker trade activity. The latest data reflect robust trade flows at the start of the year, but the outlook remains mixed due to uneven performance across key barometer components. One of the most forward-looking elements of the barometer, the new export orders index, fell to 97.9, slipping below the baseline threshold of 100. This signals a potential contraction in trade activity later in 2025, as reduced export demand could weigh on overall merchandise flows.
The WTO noted that while current trade levels are strong, much of the growth stems from frontloading by businesses seeking to avoid higher tariffs, a temporary factor unlikely to sustain momentum over the long term. Other components of the barometer indicate ongoing resilience in certain sectors. Transport-related indices, such as air freight and container shipping, rose to 104.3 and 107.1, respectively, reflecting heightened movement of goods. The automotive products index reached 105.3, supported by steady vehicle production and sales. Electronic components, which had underperformed in 2023 and 2024, also posted gains with an index reading of 102.0.
New export orders decline, signalling weaker trade outlook
Meanwhile, the raw materials index showed only marginal improvement, rising slightly to 100.8. The WTO’s preliminary trade data suggest that global merchandise trade volume, which slowed in the final quarter of 2024, likely rebounded in early 2025. However, the longer-term trade outlook remains uncertain. In its Global Trade Outlook and Statistics report released in April, the WTO projected stable trade growth of 2.7 percent for 2025 under favorable tariff conditions present at the start of the year. Under actual policy conditions as of mid-April, the organization forecasted a marginal contraction of 0.2 percent.
Since that report, developments such as trade agreements between the United States, China, and the UK, along with higher tariffs on steel and aluminum, have introduced mixed effects on global trade expectations. The overall forecast has been adjusted slightly, leaving projected trade growth effectively flat at 0.1 percent. The WTO also warned that a trade contraction remains possible if policy uncertainty escalates or if reciprocal tariffs, particularly from the United States, are reinstated. – By MENA Newswire News Desk.
