The recent upswing in global trade is showing signs of leveling off, with distinct regional disparities becoming apparent. According to Tradeshift’s Q2 Index of Global Trade Health, the United States and China are continuing their upward trajectory, while Europe struggles to maintain momentum. Meanwhile, emerging markets like Vietnam, India, Malaysia, and Mexico are experiencing rapid growth as supply chain diversification accelerates.

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Overall transaction volumes on the Tradeshift network remained steady compared to the previous quarter, with growth still trailing three points below expectations for Q2. Order volume growth, which had peaked at five points above expectations at the end of 2023, fell six points below the anticipated level.

“Order volumes have been climbing rapidly over the last six months, but the rate of acceleration is now starting to cool,” said James Stirk, CEO of Tradeshift. “This may well be the first sign that global trade’s recent resurgence is stabilizing, which could be beneficial. A more measured growth rate allows suppliers the breathing space needed to adapt and stabilize, reducing the risk of bottlenecks and disruptions.”

Key insights from this quarter’s report include:

-US Maintains Momentum: US trade activity exceeded expectations for the second consecutive quarter, with transaction volumes tracking one point above the baseline.

-China’s Steady Recovery: China’s trade activity continued to rise, exceeding expected levels by one point in Q2. This follows significant declines in the second half of 2023.

-Eurozone Plateaus: Trade activity in the Eurozone remains three points below baseline, with the region unable to surpass this level for over two years.

-UK Trade Slows: The UK experienced a decline, with transaction volumes ending Q2 five points below expected levels, reflecting ongoing challenges.

-Emerging Market Growth: Vietnam, Malaysia, India, and Mexico are seeing significant growth, with transaction volumes well above the global average.

-Sector Variability: Manufacturing activity saw a slight decrease, while demand for freight capacity remained high. The retail sector continues its slow growth trend of the past eighteen months.

-Supply Chain Liquidity: While cash flow pressures on suppliers have eased, payment cycles remain 5% longer than pre-pandemic levels, posing challenges for small and mid-sized enterprises.

“Geopolitical tensions and economic fragmentation are shaping the recovery landscape,” added Stirk. “Success in this environment requires businesses to forge new trade relationships quickly while navigating tariffs, taxes, and ESG regulations. Digitalization is crucial for companies to adapt to these changing conditions.”

This report highlights the complex and varied nature of global trade recovery, underscoring the importance of strategic adaptation and digital innovation in navigating the evolving landscape.