DHL: American Tariffs Will Not Halt Further Growth of Global Trade

Global trade is poised for growth despite changes in U.S. policy, reveals the recently published DHL Trade Atlas 2025, a joint report by DHL and New York University Stern School of Business on the state and prospects of global trade. Based on an analysis of data from nearly 200 countries and territories, DHL Trade Atlas 2025 states that global trade recovered last year and is projected to grow faster in the next five years than during the previous decade.

Recent forecasts predict that merchandise trade will grow at a compound annual growth rate of 3.1 percent from 2024 to 2029, which is roughly in line with GDP growth and represents a moderately faster growth rate compared to the previous decade. Even if the new U.S. administration implements all its proposed tariff increases and other countries retaliate, global trade is expected to continue growing over the next five years, albeit at a much slower pace.

DHL Trade Atlas 2025 outlines several reasons for optimism about the future of global trade despite the shift towards more restrictive trade policies in the U.S.: most countries still view trade as a key economic opportunity, and U.S. trade barriers could strengthen ties among other countries. Despite uncertainties, it is highlighted that the growth of global trade has proven surprisingly resilient in the face of recent disruptions. This pattern is likely to continue even when the U.S. begins to raise tariffs.

It is projected that between 2024 and 2029, India, Vietnam, Indonesia, and the Philippines will lead in terms of trade growth rate (growth rate) and volume (absolute amount) of trade. India also stands out as the country with the third-largest absolute amount of projected trade growth (6 percent of additional global trade), behind China (12 percent) and the U.S. (10 percent).

Despite widespread interest in relocating production to a country that is relatively geographically close, known as nearshoring, and producing goods closer to customers, DHL Trade Atlas 2025 shows that trade has not generally become more regionalized. Actual trade flows indicate the opposite trend. In the first nine months of 2024, the average distance traveled for all traded goods reached a record five thousand kilometers, while the share of trade within major regions fell to a new low of 51 percent.