Import surge lifts goods barometer ahead of tariff hikes

In early 2025, global trade showed renewed strength, with the WTO’s goods barometer rising to 103.5, its highest since 2021, driven by increased imports ahead of expected U.S. tariffs. Export orders, however, declined, suggesting a potential slowdown later in the year.

The WTO forecasted 2.7% growth under a low-tariff scenario, but under current policies, projected a near-flat 0.1% rise. President Trump’s proposed “reciprocal tariffs,” set to begin July 9, have triggered a global scramble for trade deals.

Global merchandise trade gained pace in early 2025, according to the World Trade Organization (WTO), as a sharp rise in imports—largely driven by tariff-related stockpiling—offset weakening export orders. The WTO’s goods trade barometer climbed to 103.5 in the first quarter, up from 102.8 in March, marking its highest level since August 2021. A reading of 100 represents trade growth that is consistent with the medium-term trend expected in the next quarter.

The WTO report indicates that the surge in trade volume during the early months of 2025 may be the result of importers rushing to make purchases ahead of anticipated tariff hikes, particularly in response to U.S. President Donald Trump’s renewed push for higher import duties and threats of further increases. If that is the case, trade growth is expected to slow in the latter half of the year, as sellers shift to fulfilling demand from existing inventories rather than continuing to place new import orders.

The new export orders index, a key leading indicator, fell to 97.9—below the baseline of 100—signaling a potential slowdown in trade growth later in the year. Conversely, most other barometer components have moved above trend. Transport indicators such as air freight (104.3) and container shipping (107.1) point to increased goods movement. The automotive products index (105.3) reflects steady production and sales, while the electronic components index (102.0) has rebounded after weak performance in 2023 and 2024. The raw materials index (100.8) remains slightly above baseline, indicating modest but positive momentum in commodity trade.

World merchandise trade-volume growth slowed in the fourth quarter of 2024, but is expected to rebound in early 2025, according to the WTO’s goods barometer and initial trade data. The WTO Secretariat’s Global Trade Outlook and Statistics report, released on 16 April 2025, projected trade growth of 2.7% for the year under a low-tariff scenario reflecting early 2025 policies. 

However, under actual trade policies in place by mid-April, the forecast shifted to a slight contraction of 0.2%. 

Subsequent developments—such as new US-China and US-UK trade deals, along with higher US tariffs on steel and aluminium—have caused minor revisions, leaving the overall forecast nearly flat at 0.1%. Still, risks remain. The reinstatement of US reciprocal tariffs or a broader spread of trade policy uncertainty could tip the balance back toward contraction in global trade.

Meanwhile, governments worldwide are rushing to secure trade agreements with the United States in a bid to avoid a new round of tariffs proposed by President Donald Trump, which could take effect on July 9. However, negotiations have been complicated by Trump’s warning that even finalized deals may not shield countries from further tariffs, casting uncertainty over ongoing talks.

On April 8, President Trump introduced “reciprocal tariffs,” claiming they were a response to what he considers unfair trade practices by other nations. While he granted a 90-day pause to give countries time to reach agreements, some officials within the administration have hinted that this deadline could be extended. Still, Trump has made it clear he is willing to move forward with tariffs against countries he sees as uncooperative.

Countries such as India, Vietnam, Japan, Malaysia, and members of the European Union are working to finalize agreements aimed at improving relations with the U.S. and avoiding potentially steep, double-digit tariffs. 

Yet, the Trump administration is also advancing plans for additional tariffs on industries it deems vital to national security, raising fresh concerns among foreign leaders. These proposed tariffs depend on the results of several ongoing investigations by the Commerce Department into imports of lumber, timber, copper, and critical minerals. 

These investigations are expected to conclude soon, and if they determine that imports threaten national security, President Trump could impose tariffs in the coming weeks. In addition, similar investigations into pharmaceuticals, semiconductors, and electronic devices are underway and may be completed in time to justify further tariffs as early as next month.

Conclusion

The early 2025 pickup in global trade appears to be fueled more by precautionary import stockpiling than by lasting demand. Despite strength in sectors like transport, electronics, and automotive goods, falling export orders and ongoing policy uncertainty pose significant risks. The WTO’s near-flat growth projection reflects the unpredictable impact of shifting U.S. trade policy, including potential new tariffs. As key investigations conclude and trade deadlines near, global trade could face renewed volatility in the second half of the year.