WTO reduces 2025 trade growth forecast

The World Trade Organization (WTO) has lowered its forecast for global trade, warning that instead of growing, trade in goods will actually shrink this year. It now expects a 0.2% decline in global merchandise trade, a major drop from its previous forecast of 3% growth made in October.

This sharp downgrade is linked to rising trade tensions, especially involving the United States. The WTO warned that if the US brings back full tariffs — like those previously introduced by former President Donald Trump — global trade could fall even more.

With the return of higher tariffs and their ripple effects around the world, the WTO says trade could drop by as much as 1.5%, which would be the worst decline since the COVID-19 pandemic in 2020.

WTO Director General Ngozi Okonjo-Iweala said this drop is a serious concern. She added that falling trade can affect the entire global economy, including financial markets and especially developing countries, which are more vulnerable to such shocks.