Global Trade Hit $35 Trillion in 2025, but UNCTAD Says Fragility Is Rising

GENEVA — Global trade rose by $2.5 trillion in 2025 to a record $35 trillion, but the United Nations trade agency said on April 7 that the expansion had carried into 2026 under growing pressure from conflict, shipping disruption and higher trade costs.

UN Trade and Development, or UNCTAD, said trade in goods drove most of last year's growth, rising about 7% and adding roughly $1.8 trillion, while trade in services grew about 8% and added around $700 billion.

The agency said growth was broad-based but stronger in developing economies in East Asia and Africa. South-South trade rose by about 9%, outpacing the global average and reinforcing the larger role of developing economies in world commerce, according to the update.

UNCTAD said early 2026 indicators still pointed to continued expansion in goods trade. It also said services were beginning to show signs of slowing.

The warning came in the next paragraph. UNCTAD said the positive trend remained fragile and that trade growth was expected to slow later in 2026 because of persistent trade tensions and rising trade costs.

The Middle East conflict and shipping disruption in the Strait of Hormuz are expected to intensify inflationary pressures on an already strained global economy, the agency said. It also cited tariffs, regulatory changes and the erosion of trade rules as added pressures.

That combination is changing how the story is told across regions. In English-language financial coverage, trade risk often appears as an outlook variable tied to freight rates, central banks and earnings guidance. In import-dependent economies, the same trend is being discussed through cooking gas, bus fares, food imports and the fiscal limits of governments already short of room to absorb new shocks.

UNCTAD used that same language of limited fiscal space in its update. For countries with little room to increase spending or cut taxes, higher energy prices and rising shipping costs can pass quickly into household inflation.

The agency said strong demand for AI-related goods, digital technologies and some green-industry products should continue to support trade in coming quarters. It said the surge in AI and information and communications technology goods was already visible in the 2025 manufacturing expansion.

Not every sector is moving in the same direction. UNCTAD said energy trade remained volatile and the automotive sector stayed subdued as protectionism increased.

One of the sharpest structural shifts remains the contraction in trade between the United States and China. UNCTAD said bilateral trade between the two fell by roughly one quarter in 2025, or about $170 billion.

The decline has not produced a simple retreat from globalization. Instead, UNCTAD said several "connector economies" have emerged as intermediaries, often serving as logistics hubs or assembly points. It named Cambodia, Egypt, Viet Nam and Indonesia as examples of economies helping stabilize flows and cushion the effects of geopolitical fragmentation.

That trend looks different depending on where it is viewed. In Washington, connector economies are often treated as strategic rerouting points in a competition with China. In Southeast Asia and parts of Africa, the same role is presented as a commercial opportunity, even as it exposes those economies to volatility they did not create.

The April update did not forecast a collapse in trade. Its core message was narrower and more immediate: growth continues, but the margin for disruption is shrinking.

That warning has become more relevant as shipping lanes and tariff schedules stop moving independently. UNCTAD said the current Middle East shock is raising trade costs at the same time that earlier trade frictions and regulatory changes are still working through the system.

For businesses, that means delays, rerouting and higher insurance or transport bills. For governments, it means less room to shield consumers. For households in countries that import fuel, wheat, fertilizer or medicines, it often means the price increase arrives before the explanation does.

UNCTAD said the main risks to the 2026 outlook were already visible. The next test will come in second-quarter trade and shipping data, which will show whether the record growth of 2025 can withstand a year in which conflict risk, tariff policy and transport costs are all rising at once.