Chennai: Since the 1990s, the rapid expansion of global trade has been a key factor in global GDP growth. But a slowdown in trade since 2020 is threatening global growth.
Trade accounts for 60% of global GDP in 2024, up from 41% in the 1990s. Since the 1990s, the rapid expansion of global trade has been a key factor in global GDP growth. Trade also promotes global productivity growth through the spread of technology and increases per capita income.
However, global trade grew by only 2.3% between 2020 and 2024, the slowest six decade performance since the 1980s. In 2024, global commodity trade grew by only 2%, compared with a 9% increase in global commercial services trade.
The deadlock between the United States and China is threatening global trade and GDP growth as they account for 35% of global GDP in 2024, up from 31.5% in 2014. Similarly, they account for 24% of commodity trade in 2024, up from 21% in 2014 and up from 21% in 2014. We are the largest consumers in the world, and China is the largest producer in the world. The slowdown in China's commodity trade growth has also brought down pressure on global trade growth.
In 2020, five trade agreements were signed on average each year, less than half of the previous decade. Restrictive measures such as import tariffs, high excise duties and anti-dumping are more than just liberalization measures such as production subsidies, labour market access and global state aid.
Under Trump 2.0, U.S. trade policy has become even more unpredictable, with the tariffs imposed by the United States and China this time being far higher than during the First Trade War. Recently, U.S. actions, such as the containment of China's AI chip exports, have had tense relationships and sunken market sentiment.
About 33% of anti-dumping investigations have begun on China. Alkaline metals, chemicals, plastics and rubber materials account for about 60% of anti-dumping investigations. With the higher tariffs imposed by the United States on China, the risk of global supply chain disruptions increases due to China's dumping.
In the case of a trade standoff, global growth rate weakened by 3.3% in 2024, compared with 3.8% before the first U.S.-China trade war in 2017. Global government debt rose sharply by 92.3% in the 2024 pandemic, as the country's fiscal stimulus mitigated the common shock, thus 82.1% in 2017. Since 2022, global manufacturing has slowed in greater policy uncertainty and out-of-disk.
Crisis, protectionist policies and regional restructuring are undermining the world economy and undermining the stability and predictability of global investment flows.
Of the total foreign exchange reserves, the US dollar's share of the year 2024 fell to about 57.8%, compared with 65.2% in 2014. Central banks have steadily increased their investment in gold in case hedges fight uncertainty. Central banks in China, India, Russia and Japan have increased their holdings of gold over the past few years.
