This year’s World Economic Forum Annual Meeting in Davos, Switzerland, placed global trade trends at the forefront of discussions.
From the return of tariffs to the growing intersection of trade and technology, here are eight critical takeaways shaping the future of global trade.
The Return of Tariffs and Global Trade Rhetoric
Tariffs have resurfaced as a significant discussion point, with U.S. President Donald Trump pledging to impose tariffs on companies not manufacturing domestically. This development, coupled with a strong emphasis on addressing trade deficits, has sparked concern over the potential for global trade wars. Despite the strong expression, the Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, urged caution, advocating against measures that could escalate into economic fragmentation.
The Debate Over Globalization and Resilient Supply Chains
The concept of “bi-globalization” or “re-globalization” emerged as participants explored geopolitical fragmentation’s potential economic costs, estimated at $6.75 trillion. WTO’s Okonjo-Iweala emphasized the importance of decentralizing supply chains to build durability, while others noted that economic fragmentation doesn’t necessarily equate to a decline in global trade—just a shift in trade partners.
Strengthening Alliances and Building New Partnerships
Between shifting alliances, regional cooperation is gaining propulsion. The EU Trade Commissioner, Maros Sefcovic, highlighted the bloc’s renewed trade discussions with regions like Mercosur, India, and Malaysia. Other regions are also making strides, with ASEAN working on a Digital Economy Framework Agreement and an integrated power grid to harness green energy potential.
Preparing for Trade Uncertainty
Businesses are increasingly focused on navigating trade uncertainties by strengthening their geopolitical foresight. A report by the World Economic Forum, in collaboration with IMD Business School and Boston Consulting Group, calls for organizations to develop tools for tracking and responding to geopolitical developments. A new Trade Compliance Practitioners group has been established to help businesses share best practices and address evolving compliance challenges.
The Role of Technology in Trade
Technology’s impact on trade continues to grow, with advancements like TradeTech offering solutions for simplifying processes, improving transparency, and enhancing supply chain visibility. The TradeTech initiative, led by public-private partnerships, is projected to boost global trade by 14% by 2040. Additionally, innovations like AI and blockchain are revolutionizing trade processes, with discussions set to continue at the 2025 TradeTech Forum.
Trade as a Catalyst for Green Growth
Trade is emerging as a critical driver of climate policies. By leveraging comparative environmental advantages, countries can optimize green production and trade practices. For instance, Morocco’s potential as a hub for green ammonia and Brazil’s capacity for sustainable aviation fuel highlight how trade can align with climate goals. The Forum and WTO are actively collaborating to identify and develop these green opportunities.
Unlocking Opportunities in Services Trade
The services sector plays a vital role in the global economy, contributing 65% of global GDP and 50% of global employment. Reducing barriers in services trade can unlock significant economic opportunities, particularly for younger demographics. Nigerian official Jumoke Oduwole emphasized the importance of regulatory transparency and fostering innovation to scale global services businesses.
Improving Labor Conditions in Supply Chains
Millions globally remain trapped in forced labor. Enhanced data tracking across supply chains can help address this issue, ensuring more ethical and sustainable trade practices.
