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The recent years have been anything but predictable. As we move further into 2022, the ongoing pandemic and added political risks will change the trajectory of the global economy. There are several trends for businesspeople to be aware of as the rest of the year unfolds.
Economic growth took a major hit in 2020. Last year, the world worked to restore global business and trade, accomplishing nearly a 6% growth globally. The outlook for 2022 is lower - estimated to be 4.4% - due to ongoing supply shortages and lowered expectations for the United States and China.
International trade continues to surge. In 2021, global merchandise trade increased by 10.8%. Trade will continue to expand this year, albeit at a slower pace. The World Trade Organization expects a 4.7% expansion in 2022. International trade is not just recovering, but it is rising beyond pre-pandemic levels. We will possibly continue seeing the growth of the largest 5 companies from 2021, Walmart, Amazon, Apple, CVS Health, and UnitedHealth Group.
Along with the increase in trade across the globe, countries are acting quickly to create new trade agreements. On January 1, the Regional Comprehensive Economic Partnership (RCEP) eliminated more than 90% of trade tariffs between 15 Asia-Pacific nations. The Trans-Pacific Partnership (TPP) is attracting new applicants including the United Kingdom, South Korea, Taiwan, and China. President Biden does not support the United States rejoining the partnership as it stands. However, the United States is falling behind on this new trend. The U.S. has not joined a new comprehensive trade pact in a decade and has only 14 agreements with 20 countries. In contrast, the European Union has 46 agreements with 78 countries. The U.S. Chamber is urging the country to follow this trend and begin to negotiate new trade deals.
Supply chain challenges have continued to affect everyone's weekly grocery store trips. COVID-19 outbreaks continue to negatively affect manufacturing hubs and U.S. ports. The supply chains cannot sustain the lack of health workers coupled with surging customer demand. However, this year is expected to bring major improvements. The U.S. Chamber is working to address the workforce challenges, modernize ports, and implement tariff relief.
Finally, the push for sustainable energy will continue to grow. Many countries have implemented goals for carbon reductions and continue to work towards these changes. New policies are likely to come into play that will affect businesses around the world. The global coal industry continues to decline as wind and solar options become more affordable. In 2021, dozens of nations planned to phase out coal. Federal investment and tax credits will continue to promote the use and deployment of renewable energy. And finally, growing infrastructure for electric vehicle charging stations will promote the purchase of EVs in more areas.
There is much to come in 2022 for consumers and businesses. These are some important trends to keep an eye on as the year progresses.
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