Global Trade's "Roller Coaster": Resilience Reconstruction Under the Wave of Protectionism

The Rollercoaster Journey of Global Trade

Over the past few decades, international trade was a core engine driving global growth and helping lift billions of people out of poverty. Today, this system is undergoing unprecedented stress tests. From supply chain disruptions caused by the pandemic, to tariff standoffs among major economies, to heightened geopolitical tensions, global trade seems to have been on a long rollercoaster ride. However, the World Bank's latest research shows that trade has not collapsed as many expected; instead, it has demonstrated remarkable resilience.

The Wave of Trade Restrictions: Unprecedented Density

Since 2015, global trade restrictions have grown exponentially. In the first ten months of 2025, more than 2,500 new trade restrictions were introduced globally—nearly five times the number in the same period in 2015. Behind these figures lie tit-for-tat tariff escalations among major economies and a decade-long accumulation of various non-tariff barriers. Meanwhile, the average level of trade policy uncertainty in the 2020s has reached nearly five times the average level of the 2000s, forcing businesses to face a highly unpredictable policy environment.

The multilateral trading system itself is also in trouble. The World Trade Organization's dispute settlement mechanism remains paralyzed, and progress on reforms since the Doha Round has been slow. Between 2020 and 2024, the world signed an average of only about six new deep trade agreements per year—less than half of the average in the 2000s. The pace of trade liberalization has clearly slowed, while protectionism seems "never satisfied."

Where Does Resilience Come From: Corporate Adaptation and the Resilience of Services

Despite the harsh environment, global merchandise trade unexpectedly accelerated in 2025. As of August, merchandise trade volumes had grown at an average monthly rate of 4.7%, significantly higher than the 2.7% in 2024 and in sharp contrast to the 0.7% contraction in 2023. This has benefited from active corporate adaptation: many companies have used existing preferential trade arrangements to reconfigure supply chains and built up inventories to hedge against policy uncertainty, thereby limiting the pass-through of costs to consumers.

Trade in services, especially business services and information services, has remained almost untouched by the direct impact of tariff escalations and has continued to grow steadily. This shows that the center of gravity of global trade is shifting from traditional goods trade toward high-value-added services, and this structural change has provided new support for trade resilience.

Emerging Markets: Deeper Integration, But Risks Also Rise

The share of developing countries and emerging market economies (EMDEs) in global trade has risen from about 25% in the early 2000s to nearly 40% today. They contribute more than 40% of global trade growth. Even more striking is that "South-South trade" among EMDEs is becoming a core pillar of the global trading system. As of 2024, about 60% of EMDEs exported more to emerging markets than to advanced economies, compared with only 28% in 2000.But deeper integration also means greater exposure to risk. When trade frictions arise among major economies, EMDEs are often indirectly affected through supply chain transmission. However, this has also prompted them to accelerate the search for new trading partners and regional cooperation mechanisms.

Regional Trade Agreements: A Revival After Silence

In 2025, regional trade negotiations saw a level of activity unseen in years. By the end of the year, more than 12 bilateral or regional trade agreements had been signed globally, more than double the annual average for 2020–2024 and even higher than the average for the 2010s. This wave of agreements was no accident; it was a strategic choice by countries to diversify and reduce reliance on single markets amid supply chain restructuring.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) continued to expand, and the African Continental Free Trade Area (AfCFTA) now covers 55 countries, making it the free trade area with the most participants. The EU signed agreements with Mercosur, Mexico, and Indonesia, and advanced negotiations with India; China upgraded its free trade agreement with ASEAN; and the United States rebalanced key partnerships through selective agreements.

These actions send a clear signal: countries are not abandoning trade, but actively adapting to a more fragmented world. Regional trade agreements are becoming the new anchor of globalization.

Policy Priorities: How Emerging Markets Can Actively Shape the Future

Facing such a changing landscape, World Bank experts have put forward four core policy recommendations:

First, embrace integration rather than protectionism. Instead of falling into tit-for-tat tariff wars, emerging markets should deepen cooperation with willing partners. Research shows that if the AfCFTA's trade facilitation and investment measures are fully implemented, African exports could grow by more than 30%, and intra-regional exports could double by 2035. Under RCEP, lower trade costs and simplified rules of origin could increase trade among its 15 members by 12% and raise real incomes by 2.5%.

Second, lower trade costs and improve domestic conditions. Non-tariff trade costs in emerging markets—such as administrative barriers and logistics bottlenecks—remain strikingly high, equivalent to an additional tariff burden of about 50 percentage points compared with advanced economies. Investing in transport, ports, and digital infrastructure, while reforming customs procedures and regulatory compliance, can quickly boost competitiveness.

Third, use industrial policy strategically and promote diversification. Industrial policy is back, but it must be targeted, transparent, time-bound, and consistent with WTO rules. Well-designed policies can foster learning effects and innovation without distorting markets. At the same time, the booming trade in services—which grew more than threefold between 2005 and 2023—requires emerging markets to increase investment in human capital and digital infrastructure.Fourth, support the rules-based multilateral system. The reduction in trade costs brought about by WTO-related reforms contributed nearly 7% of the increase in global GDP between 1995 and 2020, with low-income countries gaining more than 30%. A predictable multilateral framework remains the cornerstone of global economic stability.

The Engine Is Still Running

The global trading system is undergoing profound transformation. Although protectionism and geopolitical tensions have cast a shadow over trade, the engine of trade has not stalled. New links among developing countries, the revival of regional agreements, and proactive adjustments by companies to supply chains are all reshaping the landscape of global trade.

As World Bank experts have emphasized, trade has been and will continue to be a vital engine of progress for emerging markets. But in a world full of uncertainty, only economies that proactively embrace change and deepen integration can steer their own course in this roller-coaster journey.