High-tech goods power global trade amid uncertainty

The first half of 2026 was marked by strong growth in goods trade and more modest growth in services trade.

Released on 21 July, the latest Global Trade Update shows that global merchandise trade increased by about 12.5% in the first quarter of 2026 compared to the same period in 2025, while services trade increased by 10.5%.

In value terms, goods trade increased by approximately $1.5 trillion, while services trade added about $500 billion. Barring a sharp contraction in the second half of the year, global trade is on course to reach a record annual value in 2026.

UN Trade and Development (UNCTAD)’s nowcast points to continued momentum in the second quarter, with preliminary estimates indicating quarter-over-quarter growth of about 6% for goods trade and 2% for services.

Part of this increase in global trade during the first half of 2026 was price-driven rather than volume-driven.

Disruptions to shipping through the Strait of Hormuz, together with concerns over regional energy supplies, drove up global energy prices and increased transport and logistics costs across international supply chains. Price pressures also extended beyond energy, with increases in several other commodities, particularly metals and fertilizers.

Between January and March, global trade inflation rose sharply to 3.6%. UNCTAD’s nowcast suggests a further increase to around 5% in the second quarter.

Over the past 12 months, trade inflation has averaged more than 9%, indicating persistent price pressures across global trade. As a result, the value of goods trade rose much faster than physical trade volumes, which expanded more moderately.

Uneven growth across regions

Goods trade growth was robust across most regions in the first quarter of 2026, led by East Asia, which recorded double-digit quarter-over-quarter growth. By contrast, all other Asian subregions registered negative quarterly growth.

Performance across other developing regions was mixed. Africa and the Americas recorded import growth above the global average but comparatively weaker export performance.

Intra-regional trade expanded in most regions, although it remained weak in South America.

Although global trade imbalances remained relatively stable during the first quarter, they continued to shift among major economies.

China’s goods trade surplus widened further, while the United States’ goods trade deficit continued to narrow, reinforcing the ongoing reconfiguration of global trade balances.

By contrast, the United Kingdom’s goods trade deficit widened, while the European Union’s goods trade balance shifted from a surplus to a deficit.

Outside these major economies, trends also diverged. The combined goods trade surplus of other developing economies contracted, while that of other developed economies expanded.

AI and electric-vehicle supply chains lead trade growth

Strong demand for AI-related products, semiconductors, batteries and electric vehicle (EV) supply chains is expected to remain a key driver of trade growth.

In the first quarter of 2026, trade in AI- and EV-related goods recorded particularly strong growth.

Batteries increased by 15%, critical energy transition minerals by 38%, information and communication technology products by 14%, semiconductors by 25% and electric vehicles by 11%.

By contrast, trade in solar and wind-related products contracted during the quarter, while fossil fuel trade increased as a result of higher prices.

Overall growth in the motor vehicle sector remained below average. However, hybrid vehicles recorded strong quarterly growth and particularly robust growth over the past 12 months.

Outlook: Trade momentum expected to continue, but headwinds remain

The UNCTAD report highlights the growing influence of evolving trade policies and geopolitical developments.

Global trade is expected to continue expanding through the second half of 2026, but the pace and scale of growth remain uncertain, as renewed trade tensions, the fragile security situation in the Strait of Hormuz and continued geoeconomic fragmentation are expected to sustain inflationary pressures, increase trade costs and contribute to increasingly uneven trade performance across regions and sectors.

Source: UNCTAD