Global trade is on track to expand 7% from a year earlier to a record US$35 trillion this year before slowing in 2026, according to a recent report by the UN Trade and Development ( UNCTAD ).

The agency’s December Global Trade Update expects the US$2.2 trillion increase to comprise about US$1.5 trillion in goods and US$750 billion in services.

In 2026, however, “global trade growth is expected to be more muted as slowing global economic growth, geopolitical fragmentation, continued policy uncertainty, and heightened vulnerability weigh on trade activity”, the report says.

“In addition, rising trade costs contribute to an outlook marked by caution.

“While import demand in some consumer-driven markets and sectors, such as digital technologies and environmental industries, may provide some support, these factors are unlikely to fully offset weaker economic momentum and rising trade frictions.”

On the other hand, sentiment towards trade is “broadly supportive” in many developing regions, which could result in further expansion of intra-regional and South–South trade.

East Asia, Africa fuel growth

In the nine months to September, East Asia and Africa were the main drivers of global trade. Among major importers, US imports remained strong but Chinese imports lagged.

In September alone, trade in goods was mixed, with Brazil, South Korea and South Africa posting strong growth, while Japan and the United States saw weaker performances.

“In China, imports rose, but export growth stalled, even though the country remained the top exporter on a 12-month basis,” the report says.

Services trade was also mixed in the third quarter. Exports grew strongly in China and South Korea, but fell slightly in Japan. Imports expanded notably in Brazil and India.

Over the previous 12 months, services trade remained robust across major economies, with China and India leading in export growth.

Shift in trade patterns

The UN agency says the third-quarter data indicate a “shift in global trade growth patterns” with increased growth between politically close countries that remains above historical averages.

“Meanwhile, near-shoring, although still below historical averages, has shown improvement, suggesting slightly stronger trade growth between geographically close countries,” it says.

“Geo-economic factors continue to play a significant role in shaping key bilateral trade patterns. These dynamics have had a substantial impact on trade between major economies and on their relationships with other partners.

“However, some of these shifts have been stabilizing. For instance, over the past 12 months, trade interdependence between China and the United States has changed little, while more significant changes have occurred among some of their respective trading partners.”

Sectoral breakdowns

By sector, agricultural trade rose strongly in the September quarter. Manufacturing trade also recorded significant gains, particularly non-electrical machinery as well as iron and steel products. But trade in natural resources was more subdued.

Over the previous 12 months, trade in fossil fuels fell sharply while renewable energy trade was mixed – wind and battery-related goods expanded but trade in solar products and critical minerals fell.

“Overall, trade in renewables remained volatile, influenced by market dynamics and policy incentives,” the report says.

Electronics trade, meanwhile, outperformed manufacturing averages in the September quarter, partly driven by rising demand related to artificial intelligence.

But the auto sector continued to decline, with growth mainly driven by hybrid vehicles.