Global shared practices are drying up

This year's analysis reveals that economies are operating in increasingly divergent ways, with fewer shared best practices and more unilateral choices.

The UK’s ascent to first place is underpinned by a significant reduction in its reliance on natural resource exports – something the US, in ninth, also achieves – and a lowering of per capita carbon emissions. The UK is approaching a successful transition to higher-value, less resource-intensive trade. Emerging economies, by contrast, are navigating “selective modernization”, targeting select environmental improvements without abandoning their carbon and resource-intensive development trajectories.

China (16th) demonstrates this approach most clearly, dramatically reducing its natural resource trade dependence from 13.3% to 5.6% and improving wastewater treatment, yet continuing to grapple with the broader environmental implications of its manufacturing-heavy export economy.

New Zealand came second in the 2025 STI. After topping the Index in 2024, in 2025 it continues to embrace trade as a growth strategy via high liberalization and low tariffs. It makes use of low barriers and robust institutions to optimize its integration into global value chains.

Australia, which came third both this year and last, makes the podium by building on the solid economic foundations of a mature economy rather than pursuing dramatic structural shifts. It sets the benchmark for human capital, labor standards, and public trust in trade.

Within the top 10, South Korea, Hong Kong SAR, and the US each advanced, while New Zealand, Japan, and Taiwan each fell slightly. Sri Lanka, 20th, was the ranking’s greatest improver, up six places since last year.

The STI measures economies that are members and applicants of major trade alliances such as the Asia-Pacific Economic Cooperation (APEC), the Comprehensive and Progressive Agreement for TransPacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP).

“This year’s STI reflects how policy makers and business leaders in today’s fragmented world need to f ind a balance between efficiency and strategic autonomy, short-term profitability and long-term social cohesion, and climate ambition and development sovereignty,” says Arturo Bris, WCC Director.

Between 2022 and 2024, resilience emerged as the dominant strategy in global trade. The COVID-19 pandemic exposed critical vulnerabilities in supply chains. In response, governments launched industrial policies aimed at reducing external dependencies, reshoring critical inputs, and reasserting national control over production. This period marked the rise of friendshoring, reshoring, and selective openness.

By mid-2025, however, the consensus has moved beyond resilience. Trade liberalization has been eroded and is being replaced by a wave of unilateral trade actions – especially tariff escalations – between longstanding partners.

These shifts mark the beginning of a broader realignment — a strategic restructuring of global trade relationships and policy priorities in response to evolving geopolitical dynamics, emerging technologies, and shifting national security doctrines. What used to be a consensus around liberalization and multilateralism has been replaced by a more fragmented and transactional trade environment, the report authors say, noting three global trade-offs underway.

Efficiency vs. strategic autonomy
Short-term profitability vs. long-term social cohesion
Climate ambition vs. development sovereignty

“Economies need strategies that enable their societies to bridge existing disparities in income, to manage environmental outcomes proactively, and to pursue new economic growth opportunities,” says Kathryn Dioth, CEO of the Hinrich Foundation.

“Structural readiness and strategic positioning have today become essential for creating resilient and inclusive trading relationships in our rapidly evolving global economy. Sustainable trade is not a destination but a process of adaptation,” says Christos Cabolis, WCC Chief Economist.

The STI evaluates 72 data points across three pillars – economic, societal, and environmental:

The economic pillar reveals three distinct strategic pathways that reflect different stages of development and the market positioning of various actors. Advanced economies are seen in this year’s Index to be pursuing consolidation strategies, using their existing institutional strengths to weather global uncertainties while maintaining competitive advantages.
The societal pillar focuses on how economies navigate selective social upgrading, making targeted improvements in specific areas while managing the social tensions that accompany rapid economic transformation. Resource-dependent economies often face constrained social modernization as economic gains may be concentrated within certain sectors.
The environmental pillar captures economies at vastly different stages of reconciling trade-driven growth with environmental stewardship. A country’s development stage is found to strongly condition its approach to environmental sustainability, which determines both its priorities and capacity for action.

The 2025 STI serves as a strategic compass for policymakers, business leaders, and researchers navigating uncertainty at a time when policy volatility is outpacing traditional analysis.

The WCC and the Hinrich Foundation share a vision of trade as a means to achieve shared prosperity. The 2025 edition of the STI examines the structural strengths, institutional qualities, and strategic choices that determine how economies are responding to an increasingly fragmented trade environment.