The focus of the global trade world is, rightly, on President-elect Donald Trump and his incoming U.S. administration debating and deciding how far Washington will go in enacting new import tariffs and sanctions. How high will the tariff wall go? Will the USMCA be renegotiated? Which industries will be exempted from the new protectionism? There are a lot of outstanding questions to be answered. But the world is bigger than the U.S. or any particular sector. There are, for instance, around 5,300 different codes in the harmonized tariff code system overseen by the Brussels-based World Customs Organization. In the mountain of import and export statistics catalogued by Trade Data Monitor, here are ten trends to watch for 2025:

1. Globalization Is Not Dead: The scale of global trade is such that, even if government adopts protectionist measures en masse, it’s unlikely to collapse. Total exports in 2024 are expected to be around $25 trillion. The logistics sector along is worth over $10 trillion. Global trade isn’t going anywhere. In October, the WTO said total trade in goods should increase by 2.7% in 2025, and by a few more percentage points if conflict in the Middle East is contained. In the first 10 months of 2024, the U.S., the world’s top import market, ramped up imports 5% to $2.7 trillion.

2. American Pie: As the world’s top consumer market, the U.S. has leverage in controlling access to its markets, and its outsourcing manufactures should easily find countries able to replace China and other targets for tariffs on more favorable terms. America’s top source of imports is now Mexico, followed by China and Canada. President Trump has threatened to impose hefty tariffs on all three countries. The next biggest exporters to the U.S. are Germany, Japan, South Korea, Vietnam, Taiwan, Ireland, and India. Ireland is an interesting case. It’s the U.S.’s top supplier of pharmaceuticals, shipping in $42.8 billion worth in the first 10 months of 2024. It’s hard to imagine Washington slapping tariffs on a product as politically sensitive as pharmaceuticals. In other words, there’ll still be pie to go around.

3. China Buying: An issue that could upend geopolitics — with unintended consequences that will affect big issues like war and peace, migration, and supply chains — just as much is what appears to be a crumbling in Chinese domestic demand. In a time of geopolitical shifting and adjustments, it’s one of the key factors to watch. In the first six months of 2024, according to TDM, China was the world’s second largest importer, shipping in $1.3 trillion worth of goods, behind only the U.S. at $1.6 trillion, and followed by Germany, the Netherlands, and the UK. (France, Japan, India, South Korea and Italy round out the top ten.) In November, total Chinese imports fell 3.9% to $214.9 billion from $223.6 billion a year ago. Almost certainly knowing these numbers were coming, Beijing on Monday said it would unroll an “appropriately loose” monetary policy in 2025.

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12/13/2024 | John W. Miller | Trade Data Monitor

The evolving landscape of global trade is undergoing a significant transformation as it shifts from a unipolar system dominated by the United States (U.S.) to a multipolar framework characterized by the emergence of new economic powers, particularly China, India, and Brazil. This transition is not just a mere change in economic dominance; it heralds a profound restructuring of trade patterns influenced by the establishment of strategic alliances such as BRICS+ and the Regional Comprehensive Economic Partnership (RCEP). As these nations assert their influence, the balance of power within the global trade ecosystem is being recalibrated, prompting a reevaluation of established norms and practices.

Concurrently, advancements in technology are playing a pivotal role in this transformation, with digital trade revolutionizing how goods and services are exchanged, fintech innovations streamlining financial transactions, and artificial intelligence (AI) optimizing supply chain management. However, this multipolar trade world does not come without its challenges; geopolitical tensions, rising protectionism, and the threat of economic fragmentation pose significant risks to the stability and predictability of international commerce. Nevertheless, this environment also presents unique opportunities for smaller economies to navigate and leverage the shifting dynamics to their advantage.

This paper aims to critically analyze these multifaceted changes, exploring how emerging economies and technological advancements are reshaping global trade patterns while addressing inherent challenges and identifying strategies for resilience and growth in a complex global economy. Through case studies and future scenarios, we seek to provide valuable insights for policymakers, businesses, and institutions aiming to thrive in this new era of global trade.

The Rise of Emerging Economic Powers in Global Trade

The influence of China, India, and Brazil on current trade patterns is multifaceted, reflecting both their growing economic capacities and strategic positioning within global economic frameworks. These nations have significantly impacted the World Trade Organization (WTO), challenging the established order and contributing to a breakdown of multilateralism within the organization. This shift is part of a broader power struggle, as these emerging economies increasingly contest the traditional dominance of the U.S. and other developed nations. As a result, international governance organizations have undergone changes to better represent and incorporate the interests of these major growing economies. Their rise is not only altering trade relations but is also contributing to the evolution of the global economy, as they demand a more equitable role in shaping trade rules and policies. The economic advancements of China and India, in particular, have been notable, with both countries experiencing above-average growth in industrial value added, which further underscores their increasing influence on global trade dynamics. This ongoing evolution necessitates strategic adjustments in international trade policies and practices as the balance of economic power continues to shift toward these emerging economies.

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11/29/2024 | Najla Al Midfa | Trends Research & Advisory

Following is an excerpt. The full piece is linked below, and here.

Negotiations for a free trade agreement (FTA) between the European Union and the Southern Common Market – known by the Spanish abbreviation Mercosur (Mercado Comun del Sur), the Portuguese Mercosul (Mercado Comum do Sul), or Nemby Nemuha in Guarani – have been ongoing since 1999. Implementation of a draft deal signed in 2019 remains stalled and its future has become increasingly uncertain following the election of Argentina’s President Javier Milei and amid opposition from some corners of Europe. Nonetheless, Brazil’s President Luis Inacio “Lula” da Silva and European Commission President Ursula von der Leyen have both indicated renewed efforts to finalize a deal. Something may even emerge in the coming days at the G20 summit in Brazil…

The state of Mercosur-EU negotiations

Talks for a trade agreement between Mercosur and the EU began in 1999, marking one of the longest-running negotiations in recent history. The goal was to create a comprehensive free-trade agreement that would cover not only goods and services but also investment, government procurement and intellectual property rights. Both sides saw potential benefits: for Mercosur, increased access to the EU’s large consumer market and advanced technology, and for the EU, expanded opportunities in South America’s growing economies. In the Mercosur countries, an agreement would provide tangible economic benefits and encourage further economic and political integration, strengthening Latin America’s position in global affairs.

Nonetheless, talks floundered due to opposition from European farmers who feared being undercut on price by imports from Latin America, EU environmental concerns and worries over human rights and labor issues, as well as protectionist politicians in both EU and Mercosur countries. In South America, there are concerns over the deal’s impact on local industries and trouble getting buy-in from free trade skeptics like Argentina’s President Milei.

In particular, the election of leftist leaders – Brazil’s President Lula (2002-2010) and Dilma Rousseff (2010-2016); Argentina’s Nestor Kirchner (2003-2007), Cristina Fernandez (2007-2015) and Alberto Fernandez (2019-2023); and Uruguay’s Tabare Vazquez (2005-2010, 2015-2020) and Jose Mujica (2010-2015) – resulted in attempts at “South-South cooperation” through organizations like BRICS and UNASUR rather than the pursuit of stronger ties with Europe.

Forced to look elsewhere to pursue free trade agreements, the EU signed fully fledged agreements with two Latin American groups (Cariforum and the Central America Association), a multiparty trade agreement with three members of the Andean Community (Colombia, Ecuador and Peru), and bilateral agreements with Chile and Mexico. During that time, immense growth in Chinese trade and investment in Latin America helped China easily supplant the EU as the region’s second-largest trade partner and Mercosur’s largest trade partner.

That gap may narrow. If ratified, the EU-Mercosur deal would cover a market of over 750 million consumers – nearly 10 percent of the world’s population – and nearly 20 percent of the world’s GDP. In terms of population, it would also represent the largest trade deal struck by both the EU and Mercosur. Concretely, it would eliminate tariffs on more than 90 percent of Mercosur’s exports to the EU, allowing increased access to the European market for Mercosur’s agricultural goods such as beef, poultry, sugar and ethanol, while benefitting EU manufacturers looking to grow their exports by slashing duties on cars, car parts, chemicals, machinery and textiles. Indeed, according to the European Commission, the FTA would save 4.5 billion euros in duties annually.

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11/18/2024 | John Polga-Hecimovich | Geopolitical Intelligence Services

Some may question whether free trade agreements still have a meaningful role to play in this age of rising geopolitical tension. But many governments in the Global South—a category that covers most of the world’s countries—are still keen to liberalize trade and investment so as to leverage the power of globalization and accelerate economic development. Indonesia, for one, is determined to join the ranks of industrially advanced nations by 2045. In February 2024, it entered into negotiations for membership in the Organization for Economic Cooperation and Development, which sets the standards by which the world’s economies are widely classified.

As part of its pursuit of growth and development, Indonesia has been steadily expanding its network of FTAs with countries outside of Southeast Asia. 

In just the past several years, Indonesia has negotiated a raft of new or upgraded economic pacts with countries outside of Southeast Asia. For example, it has signed bilateral FTAs with Australia and South Korea, building on existing liberalization commitments between ASEAN and those countries. In August 2024, Jakarta and Tokyo signed a protocol upgrading their bilateral Economic Partnership Agreement, which originally came into effect in 2008. Looking beyond Asia and Oceania, Indonesia has inked partnership agreements with Chile and the European Free Trade Association. Other pacts are under negotiation; talks to conclude FTAs with Canada and the EU are said to be entering their final stages.

Given the example set by Singapore and Vietnam, it was to be expected that Indonesia’s next major target after the EU would be the TPP, a high-level free trade agreement encompassing Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam (and soon to include the United Kingdom). Jakarta’s overarching strategy, it seems, is to develop closer relations with a wide range of economic partners while maintaining ties with both the United States and China. Coordinating Minister for Economic Affairs Airlangga Hartarto has expressed a strong interest in strengthening ties with regions like Latin America, with which Indonesia has done relatively little trade in the past. As part of my work in the Jakarta-based Economic Research Institute for ASEAN and East Asia, an economists team was organized to help his ministry analyze the economic impact of membership in the TPP.

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12/09/2024 | Kimura Fukunari | Nippon.com

Contemporary conflicts are increasingly orchestrated across multiple nations and domains, manifesting in many ways, from conventional ground engagements to strategic influence operations. The informal coalition of China, Iran, Russia, and most recently North Korea (CIRN) represents a counter-influence regional network, challenging the geopolitical and economic sway of the United States and the broader West. While North Korea has joined Russian forces in Ukraine and is mostly visible for its political and military posturings, China, Iran and Russia are closely working together on building a new trade and investment platform to support their political agenda.

Although we are not yet living a full-scale global war, a global economic confrontation is underway, which could be a prelude to overt military hostilities. This paradigm shift arguably began in 2022, when Russia blocked Ukraine’s access to Black Sea trade routes, obstructing its critical export channels to the global market, a move that was met with Western sanctions. Over the past two years, the CIRN coalition (also referred to as CRINK, to include the full acronym for North Korea) has grown increasingly prominent, while trade and investment corridors have been strategically realigned by both Western and anti-Western blocs: reflecting a recalibration of global economic dependencies and a restructuring of the world’s economy.

I prefer the acronym CIRN to describe the informal alliance among China, Iran, Russia, and North Korea, as it captures the partnership’s essential dynamics. North Korea’s involvement in support of Russia’s actions in Ukraine likely depended on China’s tacit approval—if nothing else, its troops would have relied on Chinese transport routes to reach Russia. Thus, this partnership is best understood as a China-Iran-Russia network, a strategic yet informal partnership focused on advancing each country’s interests while steadily countering Western influence, particularly across Eurasia.

This informal coalition became especially evident in 2022 when Russia initiated the global economic confrontation by disrupting established trade routes. Since then, CIRN has actively explored alternative pathways for influence and trade, leveraging its position to challenge the West’s diminishing dominance on the global stage.

The wars in Ukraine and the Middle East have had two major consequences. The first is the increased strain and detrimental impact on marine transportation and logistics. Not only has the cost of international shipping and insurance risen, causing inflationary pressures, but there is also a potential that conflict would threaten the open and free sea lines, generating challenges and modifications to UN regulations. The second main impact of the two interconnected conflicts, considering their effects on the global economy, is the redefining of land trade routes since freight flows over old Eurasian routes have decreased dramatically since 2022.

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12/06/2024 | Antonia Colibasanu | Foreign Policy Research Institute