The downward pressure on global trade is increasing

2025 witnessed a dramatic fluctuation in international trade policies, with the United States launching the so-called "reciprocal tariffs" initiative in the first half of the year, igniting trade and tariff wars globally and directly impacting the international trade system centered around the World Trade Organization. As of the end of 2025, although 72% of global trade in goods can still be conducted according to the principle of most favored nation treatment, and global trade in goods has shown resilience to some extent due to the impact of "pre imported goods", the increasing uncertainty of trade policies has intensified the long-term downward pressure faced by global trade. Although emerging industries such as artificial intelligence have shown stronger growth momentum in trade compared to traditional commodity trade, they are still difficult to serve as new growth poles to drive sustainable global trade recovery. As temporary factors subside, the growth rate of global trade will further slow down.

The unilateral measures of the United States have triggered global trade policy turbulence. The World Trade Organization released the "WTO Trade Policy Review - Overview of International Trade Environment Development" in December 2025, which pointed out that policy uncertainty is becoming a core performance indicator of the deterioration of the global trade environment, and the US tariff measures are one of the key sources leading to the increase in this uncertainty. The report points out that the US tariff measures have generated policy spillover effects, inducing other countries to raise tariffs, introduce export controls, strengthen industrial support or trade remedies, adjust trade policies in green or high-tech fields, leading to intensified global trade policy fluctuations. The report also pointed out that the industrial policies implemented by the United States, such as tariff protection in the manufacturing, climate, and technology fields, have brought about a global imitation effect, causing countries to adjust their own industrial and trade policies, and the trade rule environment to become more turbulent. In an environment of increasing policy uncertainty, countries are unable to predict the next actions of the United States, businesses are unable to assess medium - and long-term trade costs, supply chains are importing ahead of schedule due to tariff expectations, resulting in distorted trade volume data, and the global industrial chain is becoming fragmented, all of which further increase the uncertainty faced by global trade development.

In response to the harm of policy uncertainty to trade, the United Nations Conference on Trade and Development pointed out in its "Global Trade Update" report released in September 2025 that global trade is often impacted by factors such as tariffs, epidemics, and geopolitical confrontations. However, the current situation is characterized by the systemic nature of uncertainty itself, which is often more harmful than tariffs themselves, because companies can adapt to the high costs brought by tariffs, but it is difficult to design response plans for policies full of uncertainty.

Temporary positive factors mask the fact that global trade has been impacted. One of the key reasons for the unexpected trade growth in the first half of 2025 is the significant increase in tariffs by the United States. A large number of American companies rushed to import and stockpile goods before the high tariff policy came into effect, completing imports for the next few months or even more than a year before the tariffs came into effect, thus creating a statistical illusion of trade prosperity. Pre imported goods "is a stress response of enterprises to the threat of tariffs, which does not represent an increase in real demand. It leads to a" high first and then low "trade cycle, masking the fact that actual demand may be weakening and the risk of trade tightening.

The World Trade Organization has raised its trade growth forecast twice in 2025, with the United States' "pre installed imports" listed as one of the main driving factors. In the August 2025 trade forecast update, the World Trade Organization raised the growth rate of global goods trade from a 0.2% decline predicted in April to a 0.9% increase. The United States saw a 14% month on month increase in imports in the first quarter of 2025, and a year-on-year increase of up to 11% in imports in the first half of 2025. In the October 2025 update, the World Trade Organization further raised its forecast for the annual growth of goods trade to 2.4%. However, the World Trade Organization warns that this "pre imported" and "inventory hoarding" will not continue indefinitely. With the actual implementation of high tariffs and the gradual digestion of inventory, import demand will decrease, leading to a suppression of trade in the second half of 2025 and 2026. The World Trade Organization has a pessimistic outlook for trade in 2026, lowering its growth forecast to around 0.5%, indicating that the boost effect of "pre imported" is temporary and that subsequent trade may be under pressure due to new tariffs and policy uncertainties. In addition to 'pre imported goods', there are several temporary factors in 2025 that have to some extent led to the' inflated 'trade volume, masking its current pressure situation. Among them, the rise in prices of bulk commodities such as energy, metals, and agricultural products, as well as the growth in trade denominated in US dollars, partially reflects the increase in prices rather than the recovery of trade volume. In addition, some countries have introduced export tax rebates, subsidies, and temporary preferential policies to alleviate the economic downturn. This will stimulate export data in the short term, but it is essentially a one-time operation and does not represent an improvement in basic demand.

The driving effect of emerging industry trade and service trade is limited. Emerging industries such as artificial intelligence and digital economy will indeed have a driving effect on trade in 2025, but they are still unable to reverse the macro trend of traditional trade decline. According to research by the World Trade Organization, although artificial intelligence hardware and digital services have high unit prices and rapid growth, their current volume is far smaller than the global trade base of traditional commodities such as clothing, automobiles, energy, and metals, thus limiting their impact on overall trade volume. Meanwhile, due to the high concentration of AI related industry chains in a few economies, trade growth cannot benefit most developing countries, limiting global growth. Many countries' economies still rely on physical exports, and digital service trade cannot completely replace the contribution of these industries to employment and foreign exchange. In addition, artificial intelligence and digital infrastructure investment and trade activities are highly sensitive to the cycle, and the level of activity depends on corporate capital expenditures and technology investments. When interest rates rise or financial conditions tighten, related expenditures quickly cool down, causing the "pull" to quickly dissipate. Long term simulations by the World Trade Organization show that if the global policy and technology gap narrows, artificial intelligence software and hardware, by participating in trade as commodities or serving other goods, are expected to increase global trade by about 34% to 37% by 2040. However, this is a "potential" estimate based on the assumption of widespread diffusion rather than a realistic forecast. If the current trade policy uncertainty is prominent and the trend of increasing digital divide continues, the prerequisite conditions for achieving the above-mentioned trade promotion functions will be difficult to meet.

Global trade will continue to face significant downward pressure in the future. As the short-term stimulus brought by 'pre imported goods' fades, global trade will more intuitively present a sustained downward or weak trend under the impact of structural, institutional, and cyclical factors in the future, including slower growth, more intense fluctuations, and intensified regionalization and fragmentation. With the intensification of anti globalization at the policy level, especially protectionism and rising tariffs, key intermediate goods and high-tech products face increased tariffs and export controls, directly raising trade costs and disrupting global division of labor. The World Trade Organization explicitly lists rising trade barriers as the core risk of deteriorating trade prospects. At the same time, geopolitical fragmentation and supply chain reshaping may increase alternative trade in the short term, but in the long run, it will reduce the overall intensity of cross-border trade and gradually narrow the scale of trade. The International Monetary Fund and the United Nations Conference on Trade and Development have both pointed out that "trade restructuring" and "economic fragmentation" will have adverse effects on trade growth. In addition, the weakening of global growth itself will drag down trade activities. The International Monetary Fund has pointed out that macro fundamentals determine the long-term direction of trade, and when consumption, corporate capital expenditures, and private investment are insufficient, goods trade is particularly under pressure. (Author: Liang Tong)