The State of World Trade in 2026: Records, Realignments & Risks
After a pandemic-driven surge, global merchandise and services trade hit record highs — but the landscape is fracturing along geopolitical fault lines, with Asia accelerating and Europe retreating, while AI hardware, EVs and digital services rewrite the rulebook.
Executive Summary
Global trade has stabilised at record levels after the extraordinary pandemic-era surge. Merchandise exports peaked near $26 trillion in 2025 — up roughly 7% from 2024 — while services exports reached $9.6 trillion, bringing combined world trade to approximately $34.65 trillion. Growth has been led by Asia, fuelled by electronics, AI-related goods and robust South–South flows. Services trade, notably ICT, finance and tourism, outpaced goods at 8–9% growth in 2024, and now accounts for roughly 28% of all trade.
Major trade hubs remain China, the United States, the EU and a rising tier of "connector" economies — India, Vietnam and ASEAN members — that bridge rival blocs. The AI and tech boom, the energy transition and persistent geopolitical tensions are the three defining forces reshaping global flows.
"AI-related goods drove nearly half of trade growth in 2025. If this momentum continues it could add half a percentage point to 2026 growth alone."
— WTO Global Trade Outlook, March 2026Trade Volumes 2023–2025
Merchandise exports eased from the $26 trillion 2022 peak to roughly $24 trillion in 2023, before rebounding. By 2024, total trade (goods + services) reached a new high of ~$33 trillion (+3.7%). WTO's 2025 figures show goods at $26.3 trillion and services at $9.56 trillion — a combined $34.65 trillion. UNCTAD reports trade grew by $2.5 trillion in 2025 to reach $35 trillion, with expansion continuing into 2026.
| Year | Goods Exports | Services Exports | Total Trade | YoY Change |
|---|---|---|---|---|
| 2022 | $26.0T | $7.0T | $33.0T | — |
| 2023 | $24.0T | $7.5T | $31.5T | −4.5% |
| 2024 | $24.6T | $8.4T | $33.0T | +3.7% |
| 2025 | $26.3T | $9.6T | $34.65T | +5.0% |
| 2026 (proj.) | $26.8T | $10.1T | ~$35.5T | +1.9–2.6% |
OECD and IMF forecasts for 2026–28 anticipate goods trade growth slowing to roughly 1.9% in volume terms in 2026, before recovering to 2.6% in 2027, subject to significant uncertainty.
Regional Flows & Major Players
Asia-Pacific emerged as the uncontested powerhouse: WTO estimates Asia's merchandise export volume soared 7.4% in 2024 — the fastest among all regions — driven by China, South Korea and Southeast Asia's electronics exports. Europe's performance was in stark contrast, with exports falling approximately –1.4% in 2024, weighed down by sluggish automotive and chemicals shipments.
North America was bolstered by US front-loading of imports ahead of anticipated tariffs, and a Mexican import rebound. South America showed recovery after 2023 weakness, while Africa's export growth remained muted due to soft Chinese commodity demand. "South–South" trade — developing economy to developing economy — is a standout trend, with UNCTAD highlighting strong intra-East Asia and intra-Africa flows.
Export volume growth, 2024
Led by China, Korea and ASEAN electronics exports. Fastest regional growth worldwide, propelled by AI hardware and EV demand.
Export volume change, 2024
Sluggish automotive and chemicals weigh on Germany and the broader EU. Energy import costs remain elevated.
Estimated goods trade growth
US tariff front-loading drove import surges. Mexico re-emerged as an EV export hub with EV exports up 927% year-on-year in 2024.
Services export growth, early 2024
ICT, finance, intellectual property and travel services all posted strong gains. India and Philippines growing as major IT exporters.
Key Trade Drivers
Geopolitics & Policy: The US–China decoupling deepens, with tariffs and export controls reshaping supply chains. Yet new "connector" economies — Vietnam, Mexico, India — have emerged to bridge rival blocs, benefiting from trade diversion. Middle East instability has raised energy and shipping costs, with Strait of Hormuz disruptions constraining fertiliser and energy flows. "Friend-shoring" — biasing trade toward geopolitically aligned partners — is on the rise, and WTO economists warn that widespread barriers could significantly cut global trade volumes.
Energy Transition & Commodities: The global shift to clean energy is creating boom trade in batteries, EVs and the raw materials that feed them. IEA reports 2023 lithium demand jumped +30%, with battery metals broadly up 8–15%. In 2024, global EV exports hit $142 billion — roughly 15% of total auto exports — led by Germany ($40.6B) and China ($32.0B). Europe shipped over half the world's EVs by value (53%), followed by Asia (35%). Conversely, fossil fuel goods face headwinds: energy trade fell ~7% year-on-year in Q3 2024.
Digital Trade & Services: The WTO's March 2026 Yaoundé MC14 decision — committing 66 WTO members covering ~70% of global trade to implement an e-commerce liberalisation framework — is the closest the world has come to a multilateral digital trade deal. Digital services now account for roughly a quarter of services exports, up from ~20% a decade ago.
Trade Agreements Since 2023
A flurry of new agreements has reshaped the global trade architecture since 2023. The most significant shifts are captured in the timeline below.
The United Kingdom became the 12th member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the first new accession since the bloc's founding. Negotiations continue for China, Taiwan and Ukraine.
After more than two decades of negotiations, the EU and Mercosur announced a landmark trade agreement covering 77 million EU and 270 million Mercosur consumers, set to slash tariffs on 91–92% of goods.
An ambitious bilateral FTA eliminating tariffs on approximately 90% of UK–India trade, projected to boost annual trade by $34 billion by 2040.
Formally signed on January 17, 2026 — now awaiting full parliamentary ratification across EU member states. One of the largest trade agreements in history by GDP covered.
At MC14 in Yaoundé, 66 WTO members adopted "interim arrangements" to implement the long-mooted multilateral e-commerce liberalisation framework — the closest to a global digital trade agreement to date.
Sectoral Highlights
Trade patterns diverge dramatically across sectors, reflecting the competing forces of technological disruption, the energy transition and geopolitical realignment.
| Sector | 2024 Trade Value | Growth | Outlook |
|---|---|---|---|
| Semiconductors & ICT | $627.6B | +19% YoY | Strong — AI/data-centre demand continues |
| Electric Vehicles | $142B | +15% of auto exports | Robust — Germany & China lead; Mexico surging |
| Digital Services | ~$2.4T | +8–15% YoY | Accelerating — WTO e-commerce deal a tailwind |
| Battery Minerals | ~$325B | +8–30% by type | High demand, concentrated supply chains |
| Energy (Fossil) | Large but volatile | −7% Q3 2024 | Under pressure from renewables displacement |
| Automotive Parts | Stagnant | ~flat | Headwinds from EV shift, EU auto slump |
| Agriculture | Stabilising | Mixed | Fertiliser cost risks; grain corridors fragile |
Upside & Downside Risks 2026–2028
The baseline projects moderate trade growth of approximately 2–3% annually. The uncertainty band, however, is exceptionally wide. WTO projects merchandise volume growth of just 1.9% in 2026 and 2.6% in 2027 — before accounting for the scenarios below.
⬇ Downside Risks
- Escalating conflicts — A protracted Middle East war could spike oil and fertiliser costs, potentially cutting trade growth by 0.5–0.7 percentage points.
- Protectionist surge — New tariff waves or semiconductor export controls could choke global value chains, significantly reducing volumes.
- Global recession — Tighter monetary policy, debt crises or fiscal strains in developing economies could sharply reduce consumer and capital goods demand.
- Supply-chain shocks — Renewed Suez, Hormuz or Taiwan Strait disruptions would raise shipping costs and delivery times globally.
⬆ Upside Potential
- AI hardware boom — Continued data-centre investment could add +0.5 pp to 2026 growth; WTO notes AI goods already drove nearly half of 2025 trade growth.
- Trade liberalisation — Rapid ratification of EU–Mercosur and new FTAs, plus the WTO e-commerce pathway, could significantly boost services flows.
- Supply-chain diversification — If firms successfully multi-source critical components, bottlenecks ease and trade resilience improves.
- Green energy boom — Accelerating EV adoption and renewable energy build-out will sustain trade in battery minerals, components and capital goods.
Policy Recommendations
WTO and UNCTAD emphasise that open, predictable trade policies are crucial for sustainable growth. Our analysis identifies the following priority actions for governments and firms.
For Governments
Keep markets open. Avoid new protectionist waves; resist "beggar-thy-neighbour" tariffs. Fragmentation harms all nations, developing economies most acutely. Maintain and deepen WTO commitments.
Accelerate trade agreements. Push for ratification of EU–Mercosur and finalise new digital economy and services pacts to integrate developing economies and boost growth.
Adapt to energy and food shocks. Collaborate on energy security (joint reserves, LNG agreements) and agricultural resilience, including stabilising fertiliser trade routes through diplomatic channels.
Support green and digital trade. Facilitate EV, solar and battery component trade; align standards to avoid carbon leakage. Use WTO e-commerce momentum to invest in digital infrastructure.
For Businesses
Diversify supply chains. Reduce over-reliance on any single country. Build dual-source arrangements for critical inputs — especially semiconductors and battery minerals.
Invest in technology and skills. Leverage the AI/tech boom with Industry 4.0 production upgrades and e-commerce capabilities to reach new markets efficiently.
Align with sustainability mandates. Shift to low-carbon inputs and circular-economy practices to pre-empt rising environmental regulations and access green-trade preferential terms.
Monitor and exploit policy windows. Track FTA developments closely — UK firms should capitalise on the India FTA; EU exporters should plan ahead for Mercosur market access.
"Maintaining open, predictable trade policies will be crucial for sustainable, inclusive trade expansion into 2028 — and beyond."
— WTO & UNCTAD Joint Assessment, 2026Sources & Methodology
This report draws on the most recent publicly available data and analysis from leading international institutions. Primary sources include WTO Global Trade Outlook (October 2024 and March 2026), UNCTAD Global Trade Updates (2024–2026), IMF World Economic Outlook, IEA Critical Minerals Market Review, and sectoral analyses by the Semiconductor Industry Association (SIA) and International Trade Centre.
All figures are in current US dollars unless otherwise stated. Volume figures are inflation-adjusted. Year-on-year comparisons use calendar-year data on a balance-of-payments basis. Projections are median-scenario estimates subject to the risk factors described in Section VII.
