With the new year almost upon us, importers and exporters around the world will be setting out their plans for the 12 months ahead. So what are some of the main trends that businesses can expect to deal with in 2025?
International trade volumes rise, but regional differences pose challenges
The last year has proved to be positive on the whole for trade. According to UN Trade and Development, 2024 is set to see global trade hit a record high of $33 trillion. This is expected to continue into 2025, with the World Trade Organization forecasting a global goods trade increase of three percent for next year, up from 2.7 percent in 2024.
However, this growth is likely to be uneven around the world, with several regions facing challenges that could threaten their performance. In Europe, for example, it was noted by Allianz that while growth is gradually improving - albeit at a slower rate than the WTO's global forecast - supply chain disruptions and a lingering recession in Germany are likely to have ripple effects across the continent.
Elsewhere, slow wage growth in the US and the knock-on effects on the economy from China's real estate crisis may also present headwinds. As a result, Allianz observed: “A one-size-fits-all strategy won’t cut it. Success in 2025 will likely require tailoring strategies to fit the unique conditions of each region.”
Geopolitics suggest an unsettled time ahead
One story that's set to dominate the global trade environment in 2025 will be the attitude taken by US president Donald Trump. He has already made clear his fondness for tariffs, both as a mechanism to address what he sees as perceived trade imbalances and as a political tool to put pressure on allies and competitors alike. One estimate by Allianz suggests that a renewed trade war could impact up to $67 billion of exports in 2025-26, with Europe and China most affected.
The exact scale of this would depend on the harshness of tariffs. Allianz noted that a relatively contained set of tariffs could see global trade growth slow by 0.6 percentage points. However, if Mr Trump imposes his previously suggested 60 percent tariffs on China and ten percent on the rest of the world, this could reduce trade growth by as much as 2.4 percentage points.
As a result, traders are likely to seek greater diversification in their supply chains to try and minimize their exposure to disruption. Looking for new trade routes and favorable environments, such as free trade agreements and other beneficial measures, is likely to be a priority in such an uncertain time.
AI poised to help streamline trade processes
The process of identifying the most advantageous choices for trade will be made easier by increased use of artificial intelligence tools. AI is already being used in trade to automate many previously-manual processes such as product classification and checking paperwork for any anomalies or omissions that may need correcting. This makes operations faster and more accurate as well as freeing up employees' time.
However, 2025 is also likely to see greater use of generative AI in trade. According to the World Economic Forum (WEF), for example, this technology could contribute as much as $4.4 trillion to global GDP across all sectors. In trade, this could be used to analyze patterns and make predictions to spot emerging trends, improve visibility over shipments and help with customer service through the use of intelligent chatbots.
The WEF also warned that there need to be internationally-agreed guardrails in place to mitigate any risk that may arise from this, such as misinformation, bias or inadvertent IP theft. Therefore, addressing such concerns will need to be a key focus when implementing AI tools.
