The GCC region continues to play an increasingly pivotal role in connecting major trade routes between East and West. The latest report from Boston Consulting Group (BCG) reveals a robust outlook for GCC trade, with total trade volume set to grow 5.5 percent annually to $2.3 trillion by 2033.
Global trade patterns are transforming significantly as new economic corridors emerge and traditional relationships evolve. The report reveals that world trade in goods is projected to grow at an average of 2.9 percent annually through 2033.
“The reconfiguration of global trade flows presents a pivotal moment for the GCC. As trade routes transform, the region isn’t just a geographic intermediary but a central orchestrator of new patterns,” stated Rami Rafih, managing director and partner at BCG.
Non-oil trade to grow 3.5 percent annually
BCG attributed this GCC trade growth to significant expansions across multiple trade corridors, with China emerging as the largest growth market at $88 billion, followed by Japan at $46 billion. The analysis also shows GCC’s non-hydrocarbon trade will grow by 3.5 percent annually, highlighting the region’s successful economic diversification efforts.
As global trade patterns shift, the GCC strengthens its position as a critical connector between East and West. This is evident in the broader transformation in global trade flows, where China’s trade with the Global South is set to increase by $1.25 trillion and trade between developing nations is projected to grow by $673 billion through 2033.
The GCC’s strategic location and expanding infrastructure position the region to capture value from these evolving trade dynamics.
“The GCC’s deliberate investment in capabilities positions it to achieve greater success through developing proactive and risk-based options rather than defaulting to reactionary responses. The key is leveraging this foundation to shape emerging trade corridors, particularly as Global South commerce evolves,” added Rafih.
Major shifts reshaping global commerce
The report also identifies major transformations across key trading regions that will reshape global commerce. While North America solidifies as a resilient trade bloc with U.S.-Mexico trade increasing by $315 billion by 2033, ASEAN emerges as a significant beneficiary of global shifts with 3.7 percent annual trade growth.
India’s trajectory is also particularly notable, with total trade expected to reach $1.8 trillion annually by 2033, driven by its increasing role as a global manufacturing hub.
Meanwhile, the growing power of the Global South marks one of the most significant developments in global trade. Representing 18 percent of the global GDP and 62 percent of the world’s population, the 133 developing nations are set to expand their trade significantly.
Annual trade among Global South nations will grow by $673 billion over the next decade, while trade between the Global South and developed economies is projected to reach $1.67 trillion annually by 2033.
Impact of Trump’s tariffs on global trade
During the U.S. presidential campaign, President Donald Trump made differing comments regarding his tariff policy. For instance, he recently stated that he would increase tariffs on Chinese goods by 10 percent and on Mexican and Canadian imports by 25 percent as soon as he takes office.
Another measure he proposed several times called for setting a 60 percent tariff on Chinese goods and a 10 percent or 20 percent tariff on imports from all other countries. Major trading partners, including the EU, Mexico, Canada and China, have declared they will retaliate with tariffs on U.S. goods, as they did from 2018 through 2020.
“We estimate that the tariffs would add $640 billion to the cost of importing goods from the top ten U.S. import nations, based on 2023 levels, unless alternative sources are found,” said BCG.
In terms of product categories imported by the U.S., the greatest impact would be on imported auto parts and automotive vehicles, which would primarily affect trade with Mexico, the EU and Japan. Consumer electronics, electrical machinery and fashion goods will be most affected by higher tariffs on Chinese goods. BCG estimates that a 60 percent tariff rate would add $61 billion to the cost of importing consumer electronics products from China into the U.S.
