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If in early 2025 you had a funny crystal ball that told you two things, that the U.S. would impose significant tariffs on the rest of the world that year and that the Strait of Hormuz would be effectively closed for much of 2026, then recent trade data would come as a shock.
UBS have been crunching some numbers and find that global export growth is running at around 19% year on year, placing it in the 84th historical percentile over the last 25 years.
Trade growth overall, they say, has only been stronger during the pandemic goods boom, around the global financial crisis amid rapid supply-chain expansion and China's integration into global trade, and during the hyper-globalisation phase of the 1990s.
The reason, UBS say, is the one you would have probably guessed: the AI/tech trade, which they say accounts for about half the increase in trade values. Asia, and China in particular Asia, generate around 95% of that tech-related contribution.
But the rising tide of the export boom isn't lifting all boats.
UBS say export volume growth is exceptionally strong in Asia ex-China (96th percentile), solid in China (70th percentile), modest in the US (59th percentile), and weak in the euro area (43rd percentile) and Japan (34th percentile).
Perhaps not surprisingly, European Trade Commissioner Maros Sefcovic said on Tuesday the European Commission will seek commitments from China to work on tackling a widening trade gap with the European Union, and for Beijing to take some initial action by early October.
(Alun John)
