SOS! Global trade is losing momentum and stagnating, with many experts expecting conditions to deteriorate further. Rescuing the situation requires action.
Current data suggests the slowdown could intensify, weighed down by weak consumer demand, high interest rates, and tighter fiscal policy. These factors are putting serious pressure on cross-border goods flows.
Against this backdrop, currency strategists at Capital Economics warn that the previous growth phase has run its course, with trade now stagnating. "Trade in goods, which is historically a bellwether of global economic health, has lost momentum in both advanced and emerging markets," analysts note.
A key indicator from the Netherlands Bureau shows that global trade volumes have been stagnant since the start of 2025, despite a pickup in activity in the United States and parts of Asia. A mix of structural and cyclical headwinds is weighing on global trade, primarily due to weak consumption in the West, especially of imported goods.
Although some sectors, such as tech component development and manufacturing, are experiencing growth, the overall picture is one of stagnation.
Even China, until recently the locomotive of global exports, has sharply reduced its contribution to trade growth. Exports have weakened amid geopolitical tensions, softer global demand, and Western companies' efforts to diversify their supply chains.
In addition, tighter monetary and fiscal policies are curbing domestic demand in many advanced economies. Capital Economics analysts see little prospect of a significant rebound. On the contrary, they expect a “prolonged soft patch” for the global economy lasting until 2026, with trade growth likely to lag behind global GDP. This marks a sharp break from the decade-long trend where trade consistently outpaced the world economy.
The overall economic climate for trade also remains fragile. Exporters are dealing with uncertain demand, logistical bottlenecks, and shifting political conditions. "For now, the golden age of global trade looks increasingly like a thing of the past," analysts conclude.
