The World Trade Organization (WTO) is sounding the alarm over impending challenges in global trade, largely attributed to US tariffs imposed during the Trump administration. In a recent press conference in Geneva, WTO Director-General Ngozi Okonjo-Iweala expressed her deep concerns about the increasingly tense relationship between the US and China, deeming it "really worrying."
The WTO's latest forecast suggests that global trade could decline by 0.2%, a significant drop from earlier expectations of 2.7% growth by 2025. The organization specifically highlighted North America, predicting trade could plunge by over 10% in that region due to tariffs and ongoing political uncertainty.
WTO chief economist Ralph Ossa emphasized that tariffs can have wide-ranging and unpredictable effects, contributing to decreased exports and weakened economic activity. Coupled with escalating trade tensions, the UN trade body, UNCTAD, predicts global growth will slow to 2.3% by 2025, hovering just below the recession threshold.
Tariffs began hitting almost all foreign imports to the US on April 5, with China facing even steeper tariffs of around 145%. Despite the gloomy forecast for the US, the WTO points out that regions like Asia and Europe might continue to experience modest trade growth.
Interestingly, this report includes a projection for services trade, which is expected to grow by 4% in 2025 but is still a decrease from prior estimates. As the world watches the effects of these tariffs unfold, early signs of market instability are already creeping in, leaving many to wonder what’s next for the global economy.
