Global merchandise trade saw a strong uptick in the first quarter of 2025 as importers accelerated purchases in anticipation of higher tariffs, according to the latest Goods Trade Barometer released by the World Trade Organization (WTO) on June 26.

The barometer reading rose to 103.5 in June, up from 102.8 in March, indicating above-trend trade activity.

However, the forward-looking new export orders index dropped to 97.9, falling below the baseline of 100 and signalling a potential slowdown in trade growth in the coming months.

The WTO’s Goods Trade Barometer serves as a composite leading indicator for global trade trends.

A reading above 100 suggests stronger-than-expected trade activity, while figures below 100 indicate weaker performance relative to recent trends.

Despite the rise in the overall barometer, the WTO cautioned that the growth may be temporary.

The surge in imports was largely driven by frontloading — a practice where importers bring forward purchases to avoid expected tariff increases.

As inventories are now well-stocked, trade volumes may decline as import demand softens and export orders continue to weaken.

Among barometer components, several indicators showed strong performance. Air freight (104.3) and container shipping (107.1) indices rose significantly, reflecting increased goods movement.

The automotive products index climbed to 105.3, supported by resilient global vehicle production and sales.

Electronic components rebounded to 102.0 after two years of underperformance, while the raw materials index registered modest growth at 100.8.

While world merchandise trade slowed in the final quarter of 2024, early indicators suggest a rebound in the first quarter of 2025.

The WTO’s Global Trade Outlook and Statistics report, issued on 16 April, projected 2.7 per cent  growth for 2025 under a low-tariff scenario.

However, based on trade policy developments through mid-April — including rising tariffs on steel and aluminium — the forecast was revised to a near-flat 0.1 per cent, with a potential contraction of 0.2 per cent under existing policy conditions.

The trade outlook remains fragile. The WTO noted that renewed reciprocal tariffs, particularly involving the United States, or escalating global trade policy uncertainty could further dampen trade prospects in the second half of the year.