Merchandised trade entered this year on an unexpectedly strong footing, propelled by high-tech manufacturing and containerised shipping across the Pacific. However, beneath the surface of these strong early performance indicators is a more fragile reality, according to the United Nations Conference on Trade and Development (UNCTAD).

In its newest report, Trade and Development Foresights 2026, UNCTAD found that the initial momentum that defined global trade over the last few quarters is already facing headwinds. Trade analysts and policymakers are warning that a combination of cooling tech sectors, structural vulnerabilities, and sudden military escalations in the Middle East will severely restrict international trade for the rest of the year.

“Fragile aggregate demand, compounded by persistent uncertainties and new geopolitical risks, suggest that the momentum observed in 2025 and early 2026 will fade as…