Global Trade Dynamics

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

Trade relationships are reconfiguring.  To check on the latest, and understand the role of geopolitics, my colleagues and I just published, "Geopolitics and the geometry of global trade-2024 update." Read it here: https://lnkd.in/gXuEMBzQ   Countries are trading more with geopolitically aligned partners. Trade’s “geopolitical distance” dropped by 7 percent between 2017 and 2024.  But the geographic distance of trade has grown slightly – so no global signature of nearshoring.   Patterns vary by country and also by sector. Overall, in the US, Germany, the UK and China, geopolitical distance of trade is dropping. The US has continued to shift trade away from China and toward other economies such as Mexico and Vietnam – sometimes when these economies form an intermediate step in flows between China and the US. European economies have drastically cut trade with Russia and increased with others, notably the US. Developing economies, rather than advanced ones, now account for the majority of China’s imports and exports.   On the other hand, developing economies such as ASEAN, Brazil, and India continue to strengthen trade ties across the geopolitical spectrum and across the globe.   More change may be in store.    To see strategic opportunity and mitigate downsides, firms should monitor changes in the geometry of trade – as well as future-looking factors like FDI and potential tariffs.   For every trade tie that weakens, another may grow stronger (just see the chart of shift in US import partners since 2017). Markets of greatest opportunity will shift, influencing manufacturing, supply chains, sales and marketing, and even product development. Scenario planning and structural segmentation of parts of the business across the world can help with resilience.  

🌍 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.

U.S. trade talks — and the world isn’t waiting 💥 Global trade is shifting. The U.S., a cornerstone of past deals, lost its voice. Before talks even begin, the U.S. usually spends six months aligning with Congress and industry. The fastest deal in history (with Singapore) still took 18 months. Most take years. Treasury officials admit nothing meaningful will happen for at least five weeks—if not six months or more. And even that’s optimistic. Quick reality check: only four officials hold authority to negotiate—and they’re stretched across competing priorities: Jame Greer at the U.S. Trade Representative’s office, Howard Lutnik at Commerce, Scott Bent at Treasury, and the President. No mid-tier support. No active engagement. The silence is shaping new alliances. Here’s what global businesses need to know: 👉 No capacity. Trade negotiations require deep technical teams, interagency coordination, and consistent diplomacy. That engine is missing. Allies reach out, but there’s no response. Talks aren’t progressing—they’re paused. 👉 Fractured Trust. Canada challenged tariffs and was penalized. Mexico aligned and was penalized. Europe cites security tensions as a deal-breaker. Japan’s signed agreement was dropped without warning. No one knows which commitments will last—or which will vanish. 👉 Volatile Policy. 95 tariff updates in 45 days. A 245% hike on Chinese goods. Partners face moving targets. Businesses face rising unpredictability. 👉 Global Realignment. Meanwhile - NOT in mainstream media - they're too busy with Trump - China is expanding Belt and Road partnerships. Europe and Japan are deepening regional trade ties. Major supply chains are under pressure to adapt—fast. 💡 What This Means: This is a credibility crisis - not a trade crisis. The vacuum is being filled by others. The longer this continues, the more influence shifts. 💥 Your Move: If you’re operating globally, this is a pivotal moment. Realize that and assume short term losses. Are you localizing key operations? Reassessing exposure to tariff risk? Doubling down on stable trade zones? Let’s talk strategy. How are you navigating this landscape? Contact us for support at KŌSE ADVISORY #Trade #Geopolitics #SupplyChain #Tariffs #BusinessStrategy #Deglobalization #Leadership

🌍 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

🌍 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

Global trade isn’t just shifting—it’s being rewritten. What’s really happening? 🔺 Tariff Hikes – Up to $3.2T in trade flows at risk. The U.S. is ramping up tariffs—China, Mexico, EU all impacted. 🌍 New Trade Geography – U.S.-China trade down, while U.S.-Mexico and U.S.-India ties deepen. Red Sea disruptions + Panama drought = stressed global arteries. 🔧 Supply Chain Reset – “China+1” is real. Final assembly moving to Vietnam, India. EV batteries increasingly made in North America. 📈 Logistics Under Pressure – Shipping volatility, labor shortages, and protectionism are here to stay. Resilience now trumps cost. So what now? ✅ Regionalize – Build supply hubs near end markets ✅ Diversify – Don’t just source cheaper—source smarter ✅ Buffer – Bake contingency into cost and capacity models ✅ Support Clients – LSPs must become geopolitical guides This isn’t just a phase. It’s a structural reset. Global trade has a new playbook. Adaptability isn’t a strength—it’s survival. Read more here - https://lnkd.in/e_jE5Eve

Global trade is projected to exceed $29 trillion by 2033. Yet, the nature of trade routes is evolving at an extraordinary pace, driven by shifting geopolitical rivalries and alliances. Why does this matter? Trade projects a massive halo in a geopolitically charged world – it impacts market competitiveness, job growth, inflation and even political outcomes. Therefore, its crucial to understand global trade and where it might be headed. BCG used 500Mn data points and the power of AI to project trade flows by product and country for the next ten years. The largest trade lane in the world used to be US-China – this will continue to shrink, creating opportunities for other nations. The Global South is emerging as a powerful force in world trade, with economies like India and ASEAN leading the charge. China is deepening ties with the Global South as its trade with the West slows. The European Union is recalibrating away from China and Russia, as it seeks to boost competitiveness. Anticipated major changes in US trade policy under the incoming administration of President-elect Donald Trump will accelerate these shifts. The North American block holds resilient so far as US stepped up trade with Mexico and ASEAN. So far, the substitution is working but further tariffs will add significant costs to global supply chains. Our latest publication from BCG’s Center for Geopolitics, “Great Powers, Geopolitics, and the Future of Trade”, launched ahead of #WEF25 in Davos, explores these pivotal shifts that are redefining the global trade map. In this short video, I share some of the key insights. For a deeper dive, read the full article here: https://lnkd.in/gm6VUQTF. Priscille Arbour Tim Figures Marc Gilbert Nikolaus S. Lang Georgia Mavropoulos Michael McAdoo Cristián H. Rodríguez-Chiffelle #BCGCenterforGeopolitics #Geopolitics #GlobalTrade #FutureofTrade #BCGatDavos

New Tariffs. New Trade Routes. New Opportunity, for Africa. On April 2nd, the U.S. rolled out sweeping tariffs, up to 49% on Asian imports, in a move that’s shaking global supply chains. But here’s the untold story: Africa is quietly emerging as a smarter, more strategic destination for global exports. 🔻 As the U.S. pivots inward and targets Asia, trade routes are shifting. 🔺 Africa is becoming more open, more connected, and more import-ready. 👀 Just look at this map. Trump’s new tariff policy slaps reciprocal tariffs on African nations, creating friction in U.S.–Africa trade. But for European exporters, this is an open invitation. Here’s why this matters: ✅ European products, especially in machinery, agri-tech, medtech, and clean energy, can now gain serious ground in African markets where U.S. goods may lose price competitiveness. ✅ Africa’s young, urban, and growing population is demanding quality, not just low cost. And European companies are known for their engineering, compliance, and reliability. ✅ Regional integration is accelerating: With AfCFTA and infrastructure improvements, exporting to Africa no longer means navigating 54 separate markets, it means tapping into one of the most dynamic trade blocs globally. 📦 While others retreat behind tariffs, Europe has a unique chance to lean in, and Africa is ready to receive. Are you a European business looking to rethink your export strategy? This map tells a story. Let’s write the next chapter, together. 👇 What’s your take on the future of EU–Africa trade? #ExportToAfrica #AfricaBusiness #Tariffs #GlobalTrade #EUTrade #AfCFTA #SupplyChainShift #MarketEntry #MadeInEurope #AfricaImports #TradeOpportunities

The global trade landscape is rapidly evolving, driven by recent U.S. tariffs and their impact on global trade, particularly concerning India. Our analysis, titled "Impact of Recent U.S. Tariffs on Global Trade and India," delves into the implications of the United States' reciprocal tariffs, shedding light on their significance for international commerce. Covering a wide range of sectors from automobiles, FMCG, textiles, pharma, to tech, Indian exporters are poised to experience both challenges and potential opportunities. As trade dynamics shift and protectionist policies gain traction, it becomes imperative for India to adapt its approach, bolster its trade (and negotiation) capabilities, and navigate this new paradigm through strategic diplomacy and proactive policy alignment. Featuring insights from distinguished experts such as Sanjay Bhattacharyya, Ambassador Dr Mohan Kumar, Atul Singh, Davinder Sandhu, and Vinay Vijay Singh, this report offers a forward-looking perspective in the midst of a transforming global landscape. I encourage you to engage with the report, contemplate the findings, and share your valuable perspectives on this crucial issue. Primus Partners Pvt Ltd Nikhil Dhaka Ipsita Gauba #USTariffs #USTrade