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Q1 Trade Growth Beats Forecasts at 3.6%
Geneva: Global trade saw a strong increase in the first three months of 2025, largely due to a surge in North American imports as businesses rushed to stock up before expected tariff hikes in the United States. The World Trade Organization (WTO) reported that the volume of world merchandise trade grew by 3.6% compared to the last quarter of 2024 and by 5.3% compared to the same period in 2024.
This growth exceeded the WTO’s projections in its Global Trade Outlook and Statistics report released on April 16, which had predicted a 2.7% increase for 2025 based on policies in place at the year’s start and a revised -0.2% assuming policy changes announced by mid-April. WTO economists, however, caution that trade growth may slow later in 2025 as businesses work through stocked inventories and face higher tariffs, projecting nearly flat annual growth of 0.1% as of mid-June.
The United States announced new tariffs on April 2, at the start of the second quarter, which prompted importers to bring forward purchases to avoid higher costs. This led to a significant 13.4% quarter-on-quarter increase in North American imports, the highest among all regions. Other regions also saw import growth: Africa increased by 5.1%, South and Central America and the Caribbean by 3.6%, the Middle East by 3%, Europe by 1.3%, and Asia by 1.1%. The Commonwealth of Independent States (CIS), including countries like Russia and Ukraine, was the only region to see a slight import decline of 0.5%. On the export side, the Middle East led with a 6.3% increase, followed by Asia at 5.6%, South America at 3.2%, Africa at 2.5%, Europe at 1.9%, and North America at 1.8%. The CIS region also experienced a 1% drop in exports.
In terms of value, measured in US dollars, global merchandise trade rose by 4% year-on-year in the first quarter of 2025, driven by strong volume growth and declining prices for some goods. The non-seasonally-adjusted value of trade fell compared to the previous quarter due to typical seasonal fluctuations, but seasonally-adjusted figures showed steady growth. Certain product categories performed strongly: office and telecom equipment surged by 16%, chemicals by 12%, and clothing by 7%. In contrast, automotive products, fuels, and mining products fell by 4% (with fuels specifically down 7%), and iron and steel dropped by 3%. While fuel prices remained stable, prices for metals and minerals, excluding gold and silver, rose by 8%.
Regionally, Africa recorded the strongest export growth in value terms, up 9% year-on-year, driven by gold, ores, cocoa, and copper, though its fuel exports declined. Asia followed with a 5% increase, led by precious metals and machinery, while South and Central America saw a 4% rise, boosted by precious metals, ores, and coffee or tea, despite declines in fuels, oil seeds, and cereals.
The CIS region was the only one to see a 6% export decline. On the import side, North America led with a 19% year-on-year increase, fueled by machinery, precious metals, and pharmaceuticals, though vehicle imports dipped slightly. South America’s imports grew by 12%, with strong demand for machinery, iron and steel products, and vehicles, while fuel imports fell. Asia’s imports rose modestly by 1%, with gains in gold and iron ore but declines in vehicles and fuels. Notably, Asian imports of integrated circuits increased. The CIS region saw a minimal 0.1% import decline.
Early data for the second quarter of 2025 suggest that import demand is slowing after the first quarter’s surge. For example, US imports, which jumped 25% year-on-year in the first quarter, grew by only 1% in April and May. For the year to date (January to May), US imports were up 15%. On the export side, China’s shipments remained steady, rising 6% year-on-year in both the first and second quarters.
Other Asian economies showed mixed results: India’s exports fell 4% in the first quarter but rebounded to a 9% increase in April. Recent trade agreements and measures have caused slight adjustments to the WTO’s forecasts, but the outlook for 2025 remains cautious. With businesses adapting to higher tariffs and managing inventories, global trade may struggle to maintain its early-year momentum.
– global bihari bureau
