Trade Resilience Amid Global Trade Talks and Uncertainty
At the start of 2025, discussions about a trade war resurfaced in international headlines. New tariffs were being implemented, old disputes were resurfacing, and uncertainty was creeping into markets already under pressure. However, instead of a complete collapse in global trade, we’ve witnessed a mosaic of tensions—intermittent and persistent—coexisting alongside a more tranquil and stable story of trade development based on cooperation and resilience.
Trade Data Highlights Resilience
According to the World Trade Organization (WTO), during the first half of 2025, global merchandise trade displayed unexpected resilience with a year-on-year growth of 4.9%. The WTO projects that global trade will grow by 2.4% in 2025 and 0.5% in 2026, with a multilateral system proving more resistant than anticipated. The WTO stands at the heart of this stability.
Latin America and the Caribbean (LAC) Stand Out
Latin America and the Caribbean (LAC) distinguished themselves in three key areas. First, merchandise exports increased by 4.5% in 2024, nearly double the global average. Concurrently, the regional trade deficit decreased almost in half, from $51 billion to $27 billion. This trend has continued, with 12 of the top 15 LAC economies increasing exports in 2025 so far.
Key Factors Behind Trade Uptick
Two primary global factors explain much of the trade expansion in the first half of 2025:
- Technology products: Information technology products, such as semiconductors, computers, servers, and telecommunications equipment, drove nearly half of the overall trade expansion in the first half of the year. These products increased by 20% annually in value, contributing to approximately 43% of global trade growth and accounting for around 15% of world trade.
- Market reconfiguration: Trade between developing countries (South-South trade) grew by nearly 8% annually, and even up to 9% if China is excluded. This dynamism offset the negative effects on other markets more affected by restrictive measures, demonstrating that the rest of the world remains a significant source of growth.
Additionally, global trade in services gained prominence, representing 27.2% of the total value of international trade in 2024. However, goods still dominate with 72.8%. In Latin America and the Caribbean, this trend is more pronounced: digital trade services accounted for only 15% of regional exports, while goods made up 85%.
Lessons for LAC
- Promote digital services and trade with neighbors and other developing countries for growth.
Digital service exports in LAC have grown at an average annual rate of 9% since 2005, reaching $87.7 billion in 2024—slightly above the global average growth of 8.4%. The fastest-growing subsectors (business and IT services) represent over 70% of LAC’s digital service exports. However, Latin America and the Caribbean’s participation in global digital service exports remains modest at just 2%, leaving ample room for growth.
Despite China’s growing importance, the United States remains LAC’s primary digital trade partner, absorbing 34% of digital exports and supplying 42% of imports. Intraregional digital deliverable service exports remain limited, accounting for only 8.4% of LAC’s digital service exports in 2023. In contrast, this proportion is 62% in Europe, highlighting the potential for increased regional integration and digital trade.
Amid global uncertainty, the WTO’s role as a stability and predictability guarantor remains crucial. Approximately 72% of global goods trade still adheres to the Most-Favored-Nation principle, underscoring the importance of a normative framework based on clear rules.
Despite near-unanimous agreement on the need for reforms, tensions between major powers and demands from various countries necessitate updating norms to reflect new realities while preserving what works. The upcoming WTO Ministerial Conference in Yaundé in March 2026 will be pivotal for advancing potential agreements.
Latin America and the Caribbean face the challenge of adapting to rapidly changing conditions. Therefore, focusing on reducing trade costs through more efficient trade facilitation, investing in product and market diversification, and advancing digital service and economy exports is essential.
The region should maximize existing trade agreements, enhance logistics and infrastructure, and collaborate closely with the private sector.
A central message for the region is that relying on a single partner for most demand and another for supply is not sustainable. It’s time to complement existing flows by looking at neighbors and the region itself for new partners and growth opportunities. There are significant prospects beyond the border.
* Johanna Hill is Deputy Director-General of the World Trade Organization and Roy Santana, Advisor.
