Global Trade Dynamics

➡️ Tariffs didn’t break global trade; they reshaped it. Trade volumes are holding up, despite initial concerns. And an undeniable surge in South-South commerce signals a fundamental shift away from traditional East-West trade corridors—demanding a fresh look at global supply chains and the evolving balance of power. China’s trade relationship with the Global South is expanding significantly. Chinese exports to developing markets presently surpass those to the U.S. and Europe, backed by strategic infrastructure investments. This dynamic is fueling more than just sales: it’s creating lasting dependencies and reshaping the competitive landscape for European companies, with potential negative credit implications for key manufacturing sectors where EU trade flows have reversed to favor China. The European Union faces the challenge of altering its trade and industrial policies to reflect these changing global trade patterns. The recent Economic Security Doctrine, designed to protect the bloc’s independence from external disruptions, highlights a growing awareness of the need for greater resilience—but the effectiveness of these measures will depend on Europe’s ability to balance openness to trade with safeguarding strategic interests and addressing internal economic challenges. ➡️ In S&P Global Ratings' latest edition of #CreditWeek, our subject matter specialists Izabela Listowska, Paul Watters, and Barbara Castellano explore how the shifting tides of global trade are challenging Europe. Read the full edition below, and subscribe to receive our forward-looking insights on emerging and established credit risks every Thursday.

🌍 From globalization to power rivalries: why the global economy is being restructured In my recent presentations to international executive committees, I have insisted on a point that forecasting models failed to capture: the unexpected global power shifts. Unlike innovation, AI, or demographic aging, trends that could be integrated into forecast models, the U.S./China rivalry is reshaping the world economy. This transition generates uncertainty, which is not quantifiable like traditional risk. We are moving from an open global trading system toward a world defined by sovereignty-based economic models. 👉 My analysis highlights three major consequences: 1️⃣ Global power shifts. The U.S. has regained economic momentum through tax cuts, fiscal stimulus, and massive investment in innovation. Structural GDP growth has risen by more than 35% since 2010 and 13% since 2019, outpacing current GDP growth. This reflects stronger productivity, higher wages and more robust consumption. At the same time, China has upgraded its technological capabilities and built an Asian growth pole, notably through Made in China 2025. Economic power is once again a direct source of political power. These dynamics, absent from traditional models, have also triggered rising public and private investment, consumption subsidies, and industrial policies with direct implications for corporate strategies. 2️⃣ The restructuring of trade flows. The “China+1” strategy reduces U.S. reliance on Chinese imports while increasing trade with other Asian countries and Mexico. Europe risks structural decoupling: higher energy costs, lagging investment, and rising imports of Chinese overcapacity in EVs, batteries, and solar panels. Reciprocal tariffs and rules of origin force companies to rethink global supply chains. 3️⃣ The deeper U.S. strategy for 2025. Beyond tariffs, the U.S. seeks to reclaim industrial leadership from China, prioritizing production over short-term consumption. Higher tariffs drive inflation, constrain spending, and alter capital flows. Economic policy uncertainty has quadrupled since 2001, reinforcing unpredictability in global markets. If the U.S. succeeds in reducing its external deficit through rising U.S. household demand for Treasuries, global effective demand could be revised downward. 🎯 What does this mean for global companies? ▶️ U.S. households may no longer be the sole anchor of global demand. ▶️ Asian regionalism will continue to drive structural growth. ▶️ Europe risks stagnant GDP growth and widening inequalities unless it addresses competitiveness gaps. ▶️ Emerging economies will define new models of consumption for their populations and, in doing so, the geography of global demand. My role as an economist is to equip leaders with analytical tools to navigate this changing landscape, where power rivalries rewrite the rules in real time.

The recently published United Nations Conference on Trade and Development (#UNCTAD) Trade Update Report presents a nuanced assessment of #global #trade dynamics at a historic moment in #society. Global trade is projected to exceed USD 35 trillion, yet its growth trajectory is moderating amid tighter financial conditions, subdued demand, and heightened geopolitical uncertainty. The report underscores that trade fragmentation has become structural rather than cyclical, driven by the proliferation of #tariffs, non-tariff barriers, export controls, and industrial #policy interventions. These measures are reshaping global value chains, accelerating trends toward diversification, near-shoring, and friend-shoring, as firms and governments seek #resilience over cost optimization. Services trade continues to outperform goods trade, supported by digitalization and the expansion of cross-border data-enabled services, while South–South trade is gaining strategic importance as emerging economies assume a larger role in global commerce. At the same time, environmental and #climate-linked trade instruments—such as #carbon pricing mechanisms and sustainability standards—are beginning to materially affect competitiveness, market access, and compliance costs, particularly for developing economies. The report highlights that policy uncertainty has become a critical constraint on investment and long-term planning, disproportionately affecting least developed countries with narrow export bases. UN Trade and Development (UNCTAD) emphasizes that the current trajectory risks entrenching asymmetries between advanced and developing economies unless coordinated, inclusive trade governance mechanisms are strengthened. In my view, these trends are redefining geopolitics and power relations, as trade and tariffs evolve into primary instruments of #diplomacy and strategic leverage. Economic partnerships increasingly reflect geopolitical calculus, exemplified by pragmatic arrangements such as the #Canada #China sectoral cooperation and the comprehensive European Union #India soon-to-be-announced agreement. By 2030 and 2050, demographic shifts and #technology acceleration will further reconfigure alliances, elevate emerging #markets, revise #strategy, and embed trade policy at the core of global #power and economic #governance.

Given the substantial changes in U.S. trade policy and ongoing geopolitical volatility, the latest update of the DHL Global Connectedness Tracker – a research report we published with our partners at NYU Stern School of Business – provides a systematic overview on how recent developments, like rising #tariffs or trade conflicts, are influencing #globaltrade. And for some, the results might be surprising: in the first half of 2025, global trade grew faster than in any half-year since 2010 – except during the temporary rebound following the COVID-19 pandemic. Although recent forecasts have been lowered, global trade is still expected to grow at about the same pace as it did over the past decade – even as trade flows between the U.S. and China have decreased. And contrary to popular belief, trade is not turning inward – goods are traveling farther than ever. As we have also seen in recent months, China’s trade with the rest of the world is a key driver of this development – with its trade with Africa and Southeast Asia expanding rapidly. For us at DHL, these insights are crucial to steer investments and ensure we can provide capacity where our customers need it. The findings of the report can also help businesses identify new global opportunities and customers – underscoring DHL’s role as a trusted partner in connecting markets and enabling growth. I encourage you to use this data-driven report to look beyond the headlines: global trade might be shifting, but it is still growing. https://lnkd.in/ek6cCcfV

We are witnessing the most profound change to the global economic order since World War II. As the global trade order fragments, governments and businesses must reorient away from unbridled free trade and toward a world with both prosperous trade and economic security. Doing so presents a number of seeming contradictions. We must reconcile our defense, economic security, and climate imperatives with the undeniable reality of global value chains. To embrace autarky would be to depress innovation, prosperity, and - ultimately - security. National economies will, and should, continue to operate within and across global value chains of production. And yet trade must be remade to be secure, fair, and compliant. To manage global trade then in this new paradigm, trade processes must be rebuilt to manage global value chains — and not merely shipments crossing borders. We must illuminate and manage these value chains as active, connected, trusted networks of production — from raw materials to finished goods. To manage trusted value chains, governments and businesses must share, connect, and process data across borders and parties in order to illuminate and govern these networks. However, this coordination and information sharing across parties must be reconciled with the dual imperatives of data sovereignty, data security, and intellectual property protection. This new era of global trade is one of tension and contradictions. New technologies and new operating models are necessary to reconcile these tensions — to preserve the many benefits of global trade while correcting the side effects and abuses. China, meanwhile, has been advancing for years a state-led technology stack and data processing system across a growing network of customs authorities and logistics operations with the power to map and manage global trade. This is a tectonic initiative with the potential to advance state aims and greatly influence global commerce. At Altana we have launched the Future of Trade Forum, a periodical publication dedicated to exploring trends, forces, and ideas for reshaping trade. In this inaugural report, we examine the rise of China’s digital trade network. https://lnkd.in/eVxUm87z

As businesses navigate the ever-changing landscape of US tariffs, what is the medium-term picture that might emerge? How might global trade look when the dust settles? One thing is clear—we are not going back to the globalization model we had so far. Beyond that, we see four potential scenarios shaping the future of global trade. After the effects of dramatic shifts in tariff rates and trade policies become clearer, the global business environment in 2026 and 2027 could take several forms. To help companies prepare, we have outlined four scenarios:    - Global Managed Trade  - North American Stronghold  - Multipolar Escalation  - Self-Sufficiency Each scenario is stress-tested across five dimensions—trade flows, financial markets, technology and innovation, corporate strategy, and the role of international institutions. In a time of strategic ambiguity, foresight is a powerful edge. https://lnkd.in/gd2Q2NdK  #GlobalTrade #Geopolitics #Resilience #ScenarioPlanning

🌍 Between fragmentation and friendshoring, how are exporters scrambling to adapt to the trade war? Today, we’re unveiling the 2025 Allianz Trade Global Survey, capturing the voices of 4,500 exporters across 9 countries that account for close to 60% of global GDP before and after the April 2 US tariff announcements. The message is clear: uncertainty and fragmentation are structural. Global trade is being reshaped in real time and exporters are navigating disruption at full speed. The shockwaves have exposed the vulnerability of companies with highly concentrated supply chains and export markets. ✓ 60% expect a negative impact from the trade war and 45% expect export turnover to decline ✓ Export growth expectations dropped from 80% to 40%, with USD305bn in export losses at stake this year ✓ Payment delays and non-payment risks on the rise: 25% anticipate payment terms longer by more than 7 days (+13pps) and 48% expect increased credit risk But companies are not standing still - having navigated successive shocks since 2020, they are diversifying partners and markets, reconfiguring logistics, and embedding risk-sharing across the value chain. In this trade environment, success depends increasingly on adaptability. Congratulations to Ana BOATA, Ano Kuhanathan, Ph.D., Françoise Huang, Dr. Jasmin Gröschl, Lluís Dalmau Taulés, Maxime Lemerle and the entire economic research team on the publication of the Global Survey! You can read all the findings here: https://lnkd.in/dC4vAgVc

In 2024, U.S.-Mexico cross-border trade continued to redefine North American economic dynamics. Through November 2024, bilateral trade reached $776B, marking an unprecedented level of economic integration that transcends conventional trade patterns. This isn't merely about numbers – it represents a fundamental realignment of global supply chains and strategic partnerships. The implications of this shift are profound and multifaceted: ↵ The elevation of regional trade blocs as primary drivers of economic resilience ↵ A strategic pivot toward geographical proximity in supply chain management ↵ The emergence of a more integrated North American manufacturing ecosystem ↵ The critical role of technological innovation in facilitating cross-border commerce ↵ The increasing significance of the U.S.-Mexico corridor in global trade flows This realignment, driven by both geopolitical imperatives and operational efficiency, signals a new era in international commerce where strategic proximity and technological integration define competitive advantage. What strategic adaptations is your organization implementing to leverage this transformative shift in North American trade dynamics? #InternationalTrade #CrossBorderCommerce #EconomicIntegration #NorthAmericanTrade

🌍 When Trade Becomes a Battlefield, Business Becomes the Casualty — or the Catalyst. In a world where tariffs, trade wars, and geopolitics dominate headlines, companies are no longer just adapting — they're recalibrating. From luxury ETFs taking a hit, to AI chipmakers like Nvidia facing new export controls, and even retailers bracing for tariff-induced demand shifts, global businesses are operating in a climate of constant uncertainty. At the same time, we see: Google's antitrust setback reminds us that regulatory risks can come from within. China is accelerating exports, racing against tariff deadlines. Investors are moving away from the dollar, signaling deeper concerns about trust. TikTok turning into a stage for trade retaliation narratives. As the WTO signals a global trade slowdown, this isn't just about policy. It's about strategic supply chain resilience, risk diversification, and long-term vision. 📦 What does this mean for leaders in manufacturing, retail, tech, and logistics? It’s time to move from reaction to reinvention. We’re not just witnessing a tariff war. We’re witnessing a redefinition of global commerce, and the companies that thrive will be those that can turn volatility into value. #GlobalTrade #SupplyChainStrategy #Tariffs #BusinessLeadership #RiskManagement #GeopoliticsInBusiness #InnovationInUncertainty

Ray Dalio does a brilliant job unpacking the visible and hidden consequences of tariffs—not just as economic levers but as geopolitical tools. One overlooked dynamic: tariffs not only shift supply chains—they harden them. Once businesses reconfigure operations around regional dependencies, the structural inertia that forms is difficult—and expensive—to undo. This isn’t just about protecting domestic industry in the short term; it’s about re-anchoring where value gets created in the long term. In a world moving toward strategic autonomy, the unintended consequence may be a permanent restructuring of globalization itself. Tariffs could be remembered less for raising revenue and more for quietly redrawing the global economic map. Curious how others are factoring this into long-term planning and investment decisions. #RayDalio #Tariffs #GlobalTrade #Geopolitics #SupplyChains #MacroTrends #PolicyAndPower #StrategicAutonomy #SecondOrderEffects