Qatar National Bank (QNB) has said that global trade prospects for 2025 are showing cautious but tangible signs of improvement, despite disruptions caused by the latest shift in U.S. trade policy. In its weekly report, the bank highlighted that while new tariffs from Washington have rattled markets, a mix of resilient exports, easing monetary policy, and renewed trade agreements are helping to steady the global economic landscape.
The turning point came on April 2, when the United States imposed sweeping tariffs of at least 10% on imports, with even higher duties targeting selected countries. The measures raised concerns over supply chain disruptions, trade disputes, and wider economic uncertainty. Following the announcement, the World Trade Organization (WTO) issued a rare warning that global trade volumes could contract in 2025, something not seen since the 2009 financial crisis and the 2020 COVID-19 pandemic.
However, QNB’s latest analysis suggests that the fallout has been less severe than initially feared. It expects global trade growth to be modest this year, but stronger than the most pessimistic projections, supported by three key factors.
First, leading indicators from Asia point to strong momentum in exports. Economies such as Japan, South Korea, Singapore, Taiwan, and Vietnam recorded average annual export growth of 6% in 2024, accelerating to 12% in the final four months of the year despite trade tensions. China also posted a 6% increase during the same period, underscoring sustained global demand. Investor confidence in the transportation sector, reflected in the rebound of the Dow Jones Transportation Average, suggests optimism for future trade flows. QNB noted, however, that part of this growth stemmed from early shipments to the U.S. market ahead of tariff deadlines.
Second, the likelihood of large-scale trade wars has decreased despite Washington’s protectionist turn. The conclusion of U.S. negotiations with major partners, including the European Union, the United Kingdom, and Japan, has reduced uncertainty and lowered the risk of escalating tariffs. At the same time, many economies are pressing ahead with multilateral trade agreements, helping to cushion the effects of U.S. policies and support global market stability.
Third, accommodative monetary policy is expected to bolster trade. The U.S. Federal Reserve is projected to cut interest rates by 125 basis points in 2026, reducing its benchmark rate to 3.25%. Meanwhile, the European Central Bank has already lowered rates by 200 basis points since mid-2024, bringing them to 2%. QNB emphasized that cheaper borrowing costs should encourage investment and consumer spending in the U.S. and eurozone, which together account for about 40% of global GDP.
The report concluded that while risks remain, 2025 is likely to see a better-than-expected performance in world trade. A combination of strong Asian exports, coordinated monetary easing, and new trade agreements is helping offset the negative effects of U.S. tariffs, offering renewed stability to the global trading system.
