Expeditors International of Washington (EXPD) Status Update summary

Macroeconomic outlook for 2025

• Global growth is expected to improve slightly in 2025, with growth engines shifting away from the U.S. and China toward other regions, though the U.S. will still see above-trend growth and China faces structural challenges.

• Inflation and interest rates are normalizing, with U.S. inflation forecast below 2.5% and Europe below 2%, allowing central banks to lower rates and improve the business environment.

• Some emerging markets like Vietnam and Mexico face higher inflation due to tight labor and infrastructure capacity, impacting their competitiveness as alternative sourcing destinations.

• U.S. manufacturing costs are rising faster than most peers, but a strong dollar underpins relative cost competitiveness globally.

Global trade and supply chain dynamics

• Global trade is returning to pre-pandemic levels, but protectionism and potential trade conflicts create a wide range of possible outcomes.

• Air cargo markets are tightening due to strong e-commerce demand and limited aircraft supply, while ocean shipping faces excess capacity and moderate demand growth.

• A modeled scenario of broad U.S. tariffs and global retaliation would shrink the U.S. economy by 1% and the global economy by 0.5% over four years, with significant trade disruptions.

Trade policy and geopolitical risks

• U.S. trade policy is expected to become more protectionist, with potential for high tariffs on China and other countries, and a mix of industrial and sustainability policy changes.

• Mexico is prioritizing nearshoring and moving upstream in manufacturing, imposing tariffs on Chinese imports and aligning with U.S. interests.

• The EU seeks negotiation but may retaliate if U.S. actions are intense, while China is preparing for targeted retaliation, especially in raw materials.

• Southeast Asia, especially Vietnam, is caught between deepening ties with China and balancing U.S. relations, while India’s export ambitions remain uncertain.