The World Trade Organization predicts a 0.2% decline in global goods trade this year, attributing it to U.S. President Donald Trump’s tariff policies and tensions with China. Without Trump’s harshest tariffs, North America is expected to see a substantial drop in exports by 12.6% and imports by 9.6%. The WTO’s initial forecast for 2025 and 2026 projected trade growth, but Trump’s trade actions led to a significant downgrade. If Trump implements his toughest tariffs, global trade could decrease by 1.5%, causing uncertainty for businesses.
Trump recently delayed the strictest tariffs for 90 days to allow over 70 countries to address U.S. trade concerns. Simultaneously, he raised tariffs on Chinese imports to 145% and engaged in tariff discussions with Canada and Mexico. Despite the temporary tariff pause, WTO Director-General Ngozi Okonjo-Iweala expressed concern about the ongoing uncertainty’s negative impact on global growth, especially for vulnerable economies.
WTO’s chief economist Ralph Ossa emphasized the adverse effects of trade policy uncertainty on trade flows and economic activity, underscoring the unintended consequences of tariffs. In a period of escalating trade tensions, understanding the trade-offs becomes crucial for navigating the complex global trade landscape effectively.
