Global trade is rising, but higher prices mask uneven gains

Global trade is expanding in dollar terms, but the headline growth does not mean that an equivalent amount of additional goods is moving through the world economy. UNCTAD estimates that global goods trade reached about $13.7 trillion in the first half of 2026, up 12.5% from the same period in 2025. Services trade rose 10.5%.

The agency’s July 21 Global Trade Update, summarized on July 22, cautions that higher energy, shipping and commodity prices account for part of the increase. That distinction matters for households, farmers and businesses: a larger trade value can reflect costlier fuel, freight and raw materials rather than stronger production or broader prosperity.

Why the trade number can mislead

Trade value measures what goods and services are worth in money. It does not, by itself, show how many containers, tons of grain, barrels of fuel or manufactured products are moving. If energy and shipping costs rise, the value of trade can increase even when physical volumes grow more slowly.

The pressure can travel far from the original disruption. Higher fuel costs raise transport and production expenses. More expensive freight and insurance can make imported goods costlier. Fertilizer shortages or higher fertilizer prices can increase farm costs, which can then affect food prices and household purchasing power.

The World Trade Organization says prolonged energy-price pressure could reduce trade growth and create spillovers for food supplies, consumers and businesses. It also estimates that about one-third of global fertilizer exports normally pass through the Strait of Hormuz. In the same assessment, the WTO says India, Thailand and Brazil depend on the Gulf for about 40%, 70% and 35% of their urea imports, respectively.

Some economies are capturing more of the gains

UNCTAD describes an uneven regional pattern, with stronger performance in East Asia and in economies linked to technology-related trade. That does not mean every Asian economy is benefiting equally. Countries integrated into fast-growing technology supply chains can gain from demand for chips, data equipment and related services, while others remain exposed to imported fuel, food, fertilizer and financing costs.

The International Monetary Fund reached a similar conclusion in its July outlook. It said war-related shocks weigh more heavily on energy importers and vulnerable economies, while artificial-intelligence demand is lifting countries connected to the global technology value chain. The IMF projects global growth of 3.0% in 2026 and 3.4% in 2027, but describes the outlook as uneven and says global disinflation has stalled.

The World Bank has likewise forecast that the conflict will weigh on global growth through higher energy prices, steeper inflation and increased borrowing costs. Its June assessment projected global growth of 2.5% in 2026, down from 2.9% in 2025, and said fertilizer prices were expected to rise with knock-on effects for food prices. Those are forecasts, not a final accounting of what every country or household will experience.

Hormuz talks offer a possible pressure release

A developing diplomatic effort could affect the trade outlook. The Associated Press reported Tuesday, August 4, that Iran and Oman had made progress toward a possible arrangement for safer shipping through the Strait of Hormuz.

AP reported that the emerging proposal could involve ships entering through an Iranian-controlled route and leaving through an Omani-controlled route, with service fees discussed by regional officials. Iranian and U.S. officials confirmed progress, but negotiations remained incomplete, and the final agreement could take a different form. A U.S. official told AP that any temporary routes would not require Iranian approval or charges.

The waterway therefore had not been durably reopened through a completed agreement as of August 4. A safe and reliable return of commercial traffic could reduce some pressure on energy, freight, insurance and fertilizer markets. Continued uncertainty would leave import-dependent countries and companies planning around higher costs and disrupted routes.

What to watch next

The more useful indicators will be physical trade volumes, energy and fertilizer prices, freight and insurance costs, and shipping traffic through Hormuz. Trade-policy activity also remains elevated. A July 23 WTO-IMF index update said global trade-policy activity averaged nearly twice its 2024 level during January through May 2026, with restrictive measures driving much of the recent rise.

The central question is therefore not simply whether global trade dollars are increasing. It is whether goods can move reliably, and at prices that households, farmers and businesses can absorb.

Sources

• UNCTAD Global Trade Update
• WTO trade outlook for the Middle East conflict
• IMF World Economic Outlook Update, July 2026
• Associated Press report on Iran-Oman Hormuz talks