WTO Warns of Possible Decline in Global Trade

The insecurity caused by the tariffs imposed by the United States could result in "severe negative consequences" for international trade, with volume declines of between 0.2% and 1.5% by 2025, the World Trade Organization (WTO) warned on Wednesday.

"I’m very concerned about the uncertainty surrounding trade policy, especially the stalemate between the United States and China," said Ngozi Okonjo-Iweala, the director-general of this international entity. While she noted that the recent easing of tariff tensions has provided temporary relief to global trade, she also warned that "persistent uncertainty could stifle global growth, which would have serious negative effects, particularly on the most vulnerable economies," she added in a statement. According to the WTO's annual projections, global trade could decline by up to 1.5% in volume by 2025, depending on Trump's trade policies. At the beginning of the year, the WTO was forecasting continued growth in global trade for 2025 and 2026, with an increase in merchandise trade aligned with global GDP growth and a faster expansion of service trade. However, following the imposition of new tariffs, the organization's economists had to revise their forecasts downward. The trade in services also faced a decline, though less significant. "With the current conditions," referring to the tariff suspension announced by Trump, "global merchandise trade volume is expected to shrink by 0.2% in 2025," though it should show a "slight recovery" of 2.5% in 2026, according to the WTO. Nevertheless, the organization also warns about "significant deterioration risks," such as the implementation of reciprocal tariffs and the indirect effects of political uncertainty, which could lead to an even more drastic decline of up to 1.5% in global trade and impact the least developed countries that rely on exports. The WTO indicated that the drop is expected to be particularly severe in North America, where exports are projected to decline by 12.6%.

It is crucial for countries to seek to diversify their export markets and foster strong trade relationships, as reliance on a single trading partner can increase vulnerability to such crises. Being prepared to adapt to changes in trade policies is vital to protecting local economies and maintaining sustained growth.