WTO Revises Global Trade Forecast Downward Amid Trump Tariff Uncertainty

The World Trade Organization (WTO) has sharply downgraded its global merchandise trade forecast, now expecting a 0.2% decline this year rather than the previously forecasted growth, citing the impact of U.S. tariffs introduced by President Donald Trump and increased trade policy uncertainty. If all suspended U.S. tariffs are reinstated, combined with spillover effects, the WTO warns the decline could deepen to 1.5%, the steepest drop since the pandemic's peak in 2020. The downturn is expected to hit North America especially hard, with a projected 12.6% drop in exports, and could particularly hurt export-oriented, least-developed countries. The WTO notes that the disruption in U.S.-China trade may prompt increased Chinese exports to other regions, while opening opportunities for other countries in the U.S. market, especially in sectors like textiles and electrical equipment. Services trade is also forecast to weaken due to reduced demand in logistics and broader uncertainty affecting travel and investment services, with growth expected to be lower than earlier projections. Despite the grim outlook, the WTO expects a modest trade rebound by 2026.