Chennai: India will be one of the key economies that are most exposed to a potential trade policy shift in the US under the new regime. Though global trade is on track to hit a record $33 trillion in 2024, the 2025 trade outlook is clouded by risks of trade wars and ongoing geopolitical challenges, finds the UN's trade and development body.
The 2025 trade outlook is clouded by potential US policy shifts, including broader tariffs that could disrupt global value chains and impact key trading partners, said UNCTAD in its global trade update. Such measures risk triggering retaliation and ripple effects, affecting industries and economies along entire supply chains. Even the mere threat of tariffs creates unpredictability, weakening trade, investment and economic growth.
Countries most exposed to changes in US trade policy are likely those with large trade surpluses with the country and higher tariff barriers. Based on 2023 figures for trade in goods, these include China with about $280 billion trade surplus, India with $45 billion, the European Union $205 billion and Viet Nam $105 billion.
Those with lesser trade surpluses, including Canada ($70 billion), Japan ($70 billion), Mexico ($150 billion) and the Republic of Korea ($50 billion), may also face some risks.
However, in 2024, global trade is poised to hit an all-time high of nearly $33 trillion, up $1 trillion from the previous year.
This 3.3 per cent annual growth is driven largely by a 7 per cent rise in trade in services, contributing $500 billion to the overall expansion. Trade in goods has grown at a slower 2 per cent this year, remaining below its 2022 peak.
Both sectors saw trade values rise in the third quarter, with momentum expected to carry into the year’s final quarter.
In the third quarter of 2024, developed economies led global trade growth, supported by stable demand and improving business conditions. Developing regions struggled during the same period. Imports fell 1 per cent for the quarter, while rose by just 1 per cent for the year. Trade between developing countries, known as South-South trade, dropped 1 per cent for the quarter, reversing earlier trends. However, developing countries’ trade remained positive on an annual basis, growing by about 3 per cent.
For the calendar year 2024, India saw goods imports rising 4 per cent, while exports growing 2 per cent, it said. UNCTAD also found that Russia’s dependence on India for trade increased by 1.8 per cent in 2024.
