The WTO issued a stern warning: tariff policies have led to a sharp deterioration in global trade prospects.

The World Trade Organization (WTO) warned in its latest "Global Trade Outlook and Statistics" report released on Wednesday that due to the impact of the Trump administration's tariff policies in the US, the global trade growth rate for this year is expected to sharply decline into contraction, with the potential to fall into a deeper abyss.

The WTO stated that, affected by the "Trump tariffs," the growth rate of global merchandise trade volume in 2025 could drop from the previous long-term growth level of nearly 3% directly to -0.2%. Among the regions, North America is the hardest hit, with both import and export trade volumes expected to decline by nearly 10%, including a 12.6% drop in export trade volume and a 9.6% decrease in import trade volume. (Source: WTO)

The report warned that this projection is based on the current scenario where "reciprocal tariffs" are partially delayed, and certain goods like consumer electronics have received partial tariff exemptions.

If the US reimposes these tariffs, the "reciprocal tariffs" alone would reduce global merchandise trade volume by 0.6% in 2025, and the spread of trade policy uncertainty could lead to a further reduction of 0.8%,

resulting in a combined 1.5% decline in global merchandise trade in 2025. Ralph Ossa, the WTO's chief economist, stated: "Our simulations show that trade policy uncertainty has a significant dampening effect on trade flows, leading to reduced exports and weakened economic activity. Additionally,

tariffs as a policy tool have broad impacts and often bring unintended consequences. In the current context of escalating trade tensions, it is more important than ever to rationally consider these trade-offs." It is worth noting that after implementing reckless tariff policies, the Trump administration has frequently issued contradictory statements, further exacerbating the risk of a global economic slowdown.

The WTO warned that trade policy uncertainty could dampen business confidence, reduce commercial investment, and thereby harm economic growth. Ultimately, the ability of businesses to cope with uncertainty will largely determine whether the positive macroeconomic momentum emerging in 2024 can translate into sustained global trade growth in the coming years.

Before Trump took office,

global trade performed strongly in 2024, with merchandise trade volume growing by 2.9% and commercial services trade increasing by 6.8%. According to forecasts, assuming the Trump administration does not further disrupt the global trade landscape, the global merchandise trade growth rate in 2026 is expected to rebound to 2.5%. However, given the current situation, it is difficult to predict what the global trade landscape will look like next year. The WTO also warned that although services trade is not directly affected by tariffs, it could still be impacted by the weakness in merchandise trade. Broader uncertainties could also suppress spending on travel and investment-related services.

In the latest report, the WTO expects

global commercial services trade to grow by 4% in 2025 and 4.1% in 2026,

both below the previous baseline forecasts of 5.1% and 4.8%.