Global trade outlook still positive despite downgrade

DHL Express and business university NYU Stern have downgraded their expectations for global trade volume growth as a result of US tariff policy, but remain positive about the outlook nonetheless.

The latest DHL Global Connectedness Tracker predicts that global trade volumes will increase by 2.5% between 2025 and 2029, which “roughly” matches the pace of growth over the past decade.

However, US tariff policy has resulted in a downgrade in the annual trade growth forecast from the previous expectation of annual growth of 3.1%. 

North America experienced the steepest downgrade, with projections falling from 2.7% in January 2025 to just 1.5% by September. Most other regions experienced smaller downward revisions.

Forecasts were upgraded for South & Central America and the Caribbean, as well as the Middle East & North Africa. Most countries in these regions face relatively small US tariff increases, and Middle East trade is expected to benefit from increased oil production and exports.

Overall, DHL Express and NYU Stern remained positive on the outlook for trade, pointing out that in the first half of the year, trade volumes grew faster than any half-year since 2010 (excluding the Covid pandemic rebound).

In the first six months of the year, trade was boosted by US buyers rushing to import ahead of tariff increases and China offsetting lower exports to the US with higher exports to other markets, they explained.

“One reason why trade can continue growing even as the US raises tariffs is that only 13% of global goods imports went to the US in 2024 and 9% of exports came from the US,”  the report authors said. "Another is that most countries have not followed the US in implementing broad tariff increases."

The authors said that China fully offset declining exports to the US with increased shipments to the Association of Southeast Asian Nations region, while also "substantially growing" its exports to Africa, the EU, and other markets.

"Even after the frontloading wave in the US subsided, global trade volumes remained above prior-year levels," they said.

DHL Express chief executive John Pearson said that the tracker highlighted "the enduring strength of global trade".

"Trade barriers do not serve the world's best interests. But we must never underestimate the creativity of buyers and sellers around the world who want to do business with each other," Pearson said.

Steven Altman, director of the DHL Initiative on Globalisation at NYU SternTrade, said: "Trade and international business investment trends so far in 2025 do not support the view that globalisation has gone into reverse.

"While it would be a mistake to disregard current policy threats to globalisation, companies are not generally pulling back from international markets, trade is crossing the longest average distance on record, and geopolitical conflicts have reshaped only a small fraction of the world's international activity.

"The latest data show companies managing the risks and opportunities of a connected world rather than retreating to within countries or regions."