The third week of December 2025 has solidified two conflicting realities for the global trade community. On one hand, the world is trading more in volume than ever before; on the other, the legal and fiscal barriers to moving those goods are rising at an unprecedented rate. From the potential fracturing of the North American trade bloc to a historic $35 trillion milestone, this week’s developments are essential for every global importer and exporter to understand.
1. 🚢 Global Trade Hits Record $35 Trillion Despite Momentum Slowdown
According to the UNCTAD Year-End Global Trade Update released this week, global trade is poised to exceed $35 trillion for the first time in history by the close of 2025. This represents a robust 7% increase compared to 2024.
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Volume over Value: Unlike 2024, where inflation drove trade values up, the growth in late 2025 is being powered by higher volumes of goods shipped.
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Sector Winners: The manufacturing sector, particularly electronics (up 14%), continues to lead the charge, fueled by global AI infrastructure demand. However, the automotive sector remains a laggard, with trade in traditional combustion-engine vehicles falling by 13%.
Regional Shifts: South-South trade (trade between develo
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ping economies) grew by 8%, outpacing the global average. For global traders, this signals a clear shift: the “developing” world is increasingly becoming its own best customer.
2. 🇺🇸 The USMCA “Divorce” Risk: USTR Signals Hardline Review
In a series of high-stakes briefings to the US Congress on December 16 and 17, 2025, US Trade Representative (USTR) Jamieson Greer sent a clear signal to the world: the US-Mexico-Canada Agreement (USMCA) is no longer a “sure thing.”
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The July 2026 Cliff: Under Article 34.7, the agreement faces a mandatory review in July 2026. Greer stated that a “rubber stamp” extension is not in the US national interest unless “structural shortcomings” are addressed.
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Bilateral vs. Trilateral: In a move that has sent shockwaves through North American supply chains, Canadian officials are reportedly weighing a bilateral trade track with the US, potentially excluding Mexico if the latter cannot resolve energy and labor disputes with Washington.
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Global Implication: For international firms using Mexico as a nearshoring hub for the US market, this uncertainty necessitates a “Plan B.” The threat of US withdrawal or a shift to bilateralism could reimpose significant duties on goods currently moving duty-free across North America.
3. 🌿 EUDR Delay Confusion: The December 30 Deadline Looming
For global exporters of agricultural commodities (coffee, cocoa, rubber, soy), this week was a period of intense regulatory monitoring. While the European Parliament and Council have reached a provisional agreement for a one-year delay to the EU Deforestation Regulation (EUDR), the legal status remains tense.
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The Legal Gap: As of December 20, the final text has not been published in the Official Journal of the EU. This means the original December 30, 2025 deadline technically remains the law of the land for large and medium enterprises.
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Trader Action: Global importers into the EU are advised to continue collecting geolocation data and due diligence statements. If the formal adoption is delayed by even a few days into January, “non-compliant” shipments could face temporary seizures at EU ports.
4. 🤝 The Rise of the “Alternative FTA” Era
With the US administration continuing its “Reciprocal Tariff” strategy, other major economies are racing to secure their own corridors.
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India-Oman CEPA: Signed on December 18, 2025, this deal provides a new gateway for Asian goods into the Middle East, bypassing traditional high-tariff routes.
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The “Anti-Tariff” Bloc: Countries including Brazil, India, and the UAE are accelerating negotiations to “blunt” the impact of the US 10% universal baseline tariff. For a global exporter, the lesson of 2025 is clear: diversification is no longer a strategy; it is a survival mechanism.
Source : unctad.org
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