Global trade in the post-COVID era is facing serious challenges including the outbreak of the coronavirus, wars in Ukraine and the Middle East, and Donald Trump's tariffs. These factors have caused significant disruptions in global supply chains, particularly in the oil, gas, food, and fertilizer markets.
Impact of Tariffs and Global Changes
The tariffs imposed by Donald Trump have driven import costs to the highest levels in decades, forcing companies to seek new suppliers and markets. According to Robert Steiger, chief economist of the World Trade Organization (WTO), these disruptions are "the most serious sustained disruptions since the establishment of the global trade system 80 years ago."
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However, despite these challenges, global trade has surprisingly remained resilient. According to the annual report of the World Trade Organization, the volume of goods trade increased by 4.6 percent last year, largely due to strong demand for advanced technologies related to artificial intelligence. Additionally, the volume of services trade grew by 5.3 percent.
Changes in Trade Patterns
China remains the largest exporter of goods in the world, while the United States continues to be the largest importer. However, Steiger pointed to the rise in artificial intelligence exports, stating that this may mask some of the real declines in global trade. Asian countries dominate the trade of AI-related goods, while Africa and many other countries are significantly absent from this market.
Since Trump's return to the presidency, he has moved towards changing global trade rules and imposing country-specific tariffs. About 72 percent of goods are still traded under the original conditions of the World Trade Organization, down from nearly 80 percent in 2022.
Despite this, globalization appears to be at a standstill. Data from the World Trade Organization shows that since around 2015, global trade has only increased at the same rate as global economic growth. Despite recent geopolitical developments, there are still no signs of a reversal of globalization.
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