World Trade Surged by 4.4% in 2025 Despite Tariffs

Global trade volumes climbed sharply in 2025 despite sweeping U.S. tariffs, defying widespread predictions that higher duties would choke off cross-border commerce, The Wall Street Journal reports.

The volume of goods traded worldwide rose 4.4% in 2025, accelerating from 2.5% growth in 2024, according to data from the Netherlands Bureau for Economic Policy Analysis (CPB). The rebound came even after President Donald Trump imposed country-specific tariffs last spring.

The strength surprised many forecasters.

Shortly after the tariff rollout, the World Trade Organization had projected that global trade would contract in 2025. Instead, trade expanded as supply chains adjusted, tariff rates were later reduced in several cases, and relatively few U.S. trading partners escalated retaliation.

Bank of England Governor Andrew Bailey told U.K. lawmakers that the feared damage did not fully materialize.

“The world economy in terms of activity and trade was more robust than we feared it would be,” Bailey said. “Some of the tariffs have not been as big as some of the announcements. World trade has adjusted. There has been an offsetting positive effect from AI.”

The CPB data show that China and much of Asia were major beneficiaries.

Chinese exports jumped 8.5% in 2025, while advanced Asian economies excluding Japan — including Taiwan — saw overseas shipments surge 15.9%. Europe’s exports slipped modestly but remained resilient overall.

Economists point to several factors explaining why tariffs didn’t stall growth.

Many companies rerouted supply chains rather than cutting production.

In addition, the United States continued to post solid domestic growth and import demand. U.S. GDP expanded at a healthy pace of 2.2% in 2025, and global manufacturing activity stabilized, helping sustain trade volumes even amid policy uncertainty.

A powerful additional driver was investment tied to artificial intelligence.

Economists at the Federal Reserve estimate that global trade in data-center equipment reached $272 billion in the first six months of 2025 — a 65% increase from the same period in 2024. The build-out of AI infrastructure boosted shipments of semiconductors, servers and related hardware, particularly from Asian producers.

Still, trade momentum is expected to cool this year.

The World Trade Organization now forecasts goods trade will expand just 0.5% in 2026, reflecting the delayed impact of tariffs and moderating AI investment.

The outlook was further complicated by a recent Supreme Court decision striking down the administration’s country-specific tariffs. In response, President Trump imposed a temporary 10% across-the-board duty on imports, authorized for up to 150 days.

According to Capital Economics, replacing the country-specific levies with a universal 10% tariff reduces the average effective U.S. tariff rate to about 10.4%, down from 14.1% under the earlier structure. That lower rate could support trade flows in the first half of 2026 as businesses take advantage of the temporary relief.

Notably, the Supreme Court ruling did not affect existing product-specific tariffs on steel and aluminum, which remain in place under separate national-security authority granted by Section 232 of the Trade Expansion Act of 1962.

Those duties generally stand at 25% on steel and 10% on aluminum, though some product categories face higher effective rates after subsequent adjustments. Because they rest on different statutory authority, they were outside the scope of the court’s decision.

Some analysts caution that trade could see short-term distortions as companies rush orders ahead of potential policy changes.

“Perversely, such surges are likely to expand the United States’ trade deficit in the near term, counter to the objectives of American policy,” wrote Simon Evenett, founder of the Global Trade Alert.

For now, however, the data show that global commerce proved more adaptable than many expected.

Even amid tariff battles, shifting legal rulings and geopolitical uncertainty, trade expanded solidly in 2025 — powered in part by the global race to build the infrastructure behind artificial intelligence.