The World Trade Organization (WTO) has projected a 0.2% decline in global goods trade for this year, attributing the downturn to U.S. President Donald Trump’s fluctuating tariff policies and the ongoing trade tensions with China. The WTO cautioned that the situation could worsen significantly if Trump implements his most stringent reciprocal tariffs. The global trade forum highlighted that North America would experience the sharpest decline, with exports expected to plummet by 12.6% and imports by 9.6% this year, even without the harshest tariffs. The WTO’s report, based on the tariff landscape as of Monday, initially anticipated continued trade expansion in 2025 and 2026. However, Trump’s trade war has compelled WTO economists to drastically revise their forecasts. If Trump enacts the toughest tariffs on most nations, global trade in goods could slump by 1.5%, primarily due to the uncertainty unsettling businesses. Earlier this month, Trump temporarily suspended the most severe tariffs for 90 days, allowing over 70 countries to address U.S. trade concerns. Concurrently, he has escalated taxes on Chinese imports to 145% and is embroiled in protracted tariff negotiations with Canada and Mexico. WTO Director-General Ngozi Okonjo-Iweala emphasized that the persistent uncertainty threatens to hinder global growth, with particularly adverse effects on the most vulnerable economies. WTO Chief Economist Ralph Ossa noted that trade policy uncertainty significantly dampens trade flows, reducing exports and weakening economic activity. He stressed the importance of understanding the wide-ranging and often unintended consequences of tariffs in an increasingly tense global trade environment.
World Trade Organization says global trade could slide this year because of Trump’s tariff policies
