Enhance Global Cooperation through the flows of goods and services, trade, capital and people.

 Cooperation refocused on intangible flows, often driven by a desire to reshape interdependencies, while 2025 brought uncertainty about trade barriers as well as decreased labour flows.The challenge will be for companies and countries to navigate a spectrum of preferences and market access arrangements – and what this will eventually mean for Global commercial flows.

The trade and capital pillar looks at cooperation through flows of goods and services, trade, capita land people. It includes metrics about the magnitude of flows – such as foreign direct investment (FDI) or labour migration – and the distribution of flowsacross different economies. The latest barometer reading indicates cooperation in trade and capital stayed broadly flat (Figure 4), but beneath the surface, changes are evident. Flows of services and capital continued to rise. However, overall trade volumes experienced headwinds. While they have nearly kept pace with the overall economy – including in 2025 – material changes in trade ties are unfolding.

Goods trade, the historical core of this pillar, grew slightly slower than overall GDP (gross domestic product), leading to a slight decline in this metric. More notable than the overall value of trade is its composition. As the global multilateral system sees pressures, a large reconfiguration in trading partners is playing out: McKinsey Global Institute research finds goods trade is falling between countries that are geopolitically distant (less aligned), and instead shifting towards more geopolitically proximate partners. The average geopolitical distance of global goods trade has fallen by about 7% between 2017 and 2024. Developing countries and China have gained a larger share of manufacturing exports: in 2024, their exports rose by $276 billion, or 5 percentage points, of which China represented more than half the total growth. Overall trade relationships slightly diversified, as the trade concentration metric fell by about 1%. Taken together, these shifts suggest that global trade is redistributing within aligned networks while diversifying across partners. Undeniably, a series of US tariff announcements in 2025 raised questions about the future of trade. Early indicators suggest that rather than leading to a contraction, these announcements have fuelled a reconfiguration. Trade volumes are estimated to have grown in 2025 (by about 2.4%), though slightly below the pace of real GDP growth (3.2%). However, reconfiguration intensified – US imports from China fell by about 20% in the first seven months of 2025, compared to the same period in 2024, while imports from geopolitically closer partners in Europe and Asia increased. Flows of capital and services, on the other hand, trended upward. This was often motivated by countries seeking to attract know-how and capital from overseas to boost their own domestic capabilities. Cross-border capital flows have increased continually since 2022, with growth in metrics that track foreign portfolio flows and direct investment stock. In the case of FDI, newly announced greenfield projects have surged in future-shaping industries and the resources that power them – semiconductors, data centres/AI, electric vehicle (EV) batteries, and critical minerals – as nations work with their close partners to build capacity in strategically sensitive areas. Compared to trade, the geopolitical distance of greenfield FDI has fallen about twice as fast. Much of this pipeline is heading to advanced economies – particularly the US – as they invest more in one another and reduce FDI announcements into China, whose share fell from 9% of total announced FDI inflows in 2015–19 to only 3% in 2022–25. These trends further intensified in 2025. Services trade also ratcheted higher, continuing its five-year run of growth since the low point of 2020. Gains were mostly driven by digitally delivered services (such as IT services), travel and other business services (professional, technical, R&D/engineering). In 2025, WTO estimates point to moderating but still positive growth in services trade, with digitally delivered services remaining firm as travel and transport normalize under lingering policy uncertainty. As in most pillars, metrics closely associated with global multilateral cooperation fell the most. Official development assistance (ODA) had the largest decline in this pillar, 10.8% in 2024, marked by lower aid to Ukraine, reduced humanitarian aid and weakened refugee spending. Only four countries exceeded the UN target of 0.7% GNI (gross national income), as countries adjusted their priorities amid a more fragmented global landscape. For 2025, the Organisation for Economic Co-operation and Development (OECD) estimated another 9–17% fall in ODA, reflecting multi-year reductions across several top donors.22 Finally, after growing uninterruptedly since 2020, international labour migration may be approaching an inflection point. The global stock of labour migrants grew in 2024, but signs of a slowdown emerged; for example, new migration flows to OECD countries weakened by 4% in 2024. In 2025, a sharp contraction played out. Net migration inflows into the US and Germany fell by an estimated 65% and 39% compared to 2024, respectively (Figure 5). While 2025 certainly introduced new tensions, the direction of travel was often consistent with previous years. The goods trade share of the global economy declined slightly, capital flows increased and labour migration restrictions intensified. In this landscape, about 85% of the council members surveyed perceived cooperation to be broadly declining. Forty percent of surveyed executives pointed to growing barriers in trade, talent and cross-border capital flows as hampering their ability to do business. Notably, though, the remaining 60% said the effects were not substantially negative, at least to date. This may illustrate the fact that many organizations have found ways to readjust their strategies to navigate increased turbulence in the world of trade. Looking ahead, there are many fast-moving currents under the surface – such as opportunities to rearrange trade between new partners, and participate in fast-growing corridors such as those between emerging economies. Recent examples of increased cooperation – from major players and coalitions of smaller economies – include the September 2025 launch of the Future of Investment and Trade (FIT) Partnership that is bringing together 14 small and medium-sized economies in trade; the graduation of the EU– Mercosur accord into the adoption phase; the conclusion of the EU–Indonesia deal after a decade; the conclusion of a Digital Economy Framework Agreement (DEFA) among ASEAN nations; and the US striking Bilateral deals for critical minerals with close partners (e.g. Australia in October 2025). Of course, the idea of smaller trade coalitions is not new – more than 370 regional trade agreements have been signed since 1995. The challenge moving forward will be for companies and countries to navigate a spectrum of preferences and market access arrangements – and what this will eventually mean for global commercial flows.

2025 overview of trade and capital – indicators and survey

Net sentiment score (positive minus negative answers); pp