The World Trade Organization (WTO) warned Wednesday that the prospects for global trade have been “abruptly deteriorated” following the Rate Regime of US President Donald Trump.
“The prospects for global trade have deteriorated sharply due to an increase in the uncertainty of tariffs and commercial policy,” WTO said in its latest report of “global and statistical commercial perspectives” on Wednesday.
Based on rates currently in force, and including a 90 -day suspension of “reciprocal rates”, the volume of world merchandise trade is now expected to decrease by 0.2% in 2025, before publishing a “modest” recovery of 2.5% in 2026.
The decrease is expected to be particularly steep in North America, where exports are forecast to decrease by 12.6% this year.
The WTO also warned that there are “severe downward risks”, including the application of “reciprocal” tariffs and a broader spill of political uncertainty, “that could lead to an even more clear decrease of 1.5% in the world trade of goods”, particularly harmed of export -oriented countries and less developed.
The recent tariff disturbances follow a strong year for world trade in 2024, during which the merchandise trade grew 2.9% and the trade of commercial services expanded by 6.8%, the WTO said.
The new estimate of a 0.2% decrease in world trade by 2025 is almost three lower percentage points than it would have been under a “low tariff” baseline stage, the WTO added, and marks a significant reversal since the beginning of the year when economists of the commercial body hoped to see the continuous expansion of the expansion compatible with the improvement of macroeconomic conditions.
“The risks to the prognosis include the implementation of reciprocal tariffs currently suspended by the United States, as well as a broader spill of the uncertainty of commercial policy beyond commercial relations linked to the United States,” the WTO said.
“If promulgate, reciprocal tariffs would reduce the growth of world goods by 0.6 additional percentage points, which raises particular risks for less developed countries (LDC), while a spread of the uncertainty of commercial policy (TPU) would shave a commercial volume of 0.8 percentage.
Trump surprised commercial partners and global markets in early April, when he announced a series of “reciprocal” tariffs in imports from more than 180 countries. Beijing was harder of all, with the duty of the US. In Chinese imports that now have a total of 145%. China in turn responded to Washington with retaliation rates of up to 125% in American imports.
The widespread turbulence of the market after the announcement of the tariffs caused a temporary increase by Trump, and the president announced last week that the new tariffs on imports from most commercial partners would be reduced to 10% for 90 days to allow commercial negotiations with Washington’s counterparts.
The WTO said in its Wednesday report that it is likely that the impact of recent changes in commercial policy vary strongly from one region to another.
In the adjusted forecast, North America now subtracts 1.7 percentage points of world merchandise trade in 2025, which makes the general figure negative.
Meanwhile, Asia and Europe continue to contribute positively, but less than on the reference scenario, with the contribution of Asia in half to 0.6 percentage points.
It is expected that the interruption in the US-China trade “triggers a significant commercial diversion,” the WTO added, which increases concerns between third markets about the increase in China’s competition.
“It is expected that Chinese goods exports will increase from 4% to 9% in all regions outside the America, since trade is redirected. At the same time, American imports of China are expected to abruptly fall in sectors in sectors, such as textiles, clothing and electrical equipment, creating new export opportunities so that other suppliers can fill the gap,” said the commercial organization that this could open the door of the door less important to increase its exports to export countries to their exports to exports countries to export countries to export countries to the US countries.
