According to the latest Global Trade Outlook and Statistics report published by the World Trade Organization (WTO), the outlook for global trade has deteriorated sharply due to a surge in tariffs and trade policy uncertainty. The volume of world merchandise trade is expected to decline by 0.2 percent in 2025 under the current conditions, before posting a modest recovery of 2.5 percent in 2026. The new estimate for 2025 is nearly three percentage points lower than it would have been without the recent policy shifts. At the start of 2025, WTO economists expected to see continued trade expansion supported by improving macroeconomic conditions.
The WTO noted that the implementation of the currently suspended reciprocal tariffs by the US, as well as a broader spillover of trade policy uncertainty beyond US-linked trade relationships, poses the risk of an even sharper decline of 1.5 percent in the world merchandise trade volume in 2025.
According to the report, the impact of recent trade policy changes varies sharply across regions. North America now subtracts 1.7 percentage points from global merchandise trade growth in 2025, turning the overall figure negative, while Asia and Europe continue to contribute positively, with Asia’s contribution halved to 0.6 percentage points.
Meanwhile, the disruption in US-China trade is expected to trigger significant trade diversion, raising concerns among third markets about increased competition from China. Chinese merchandise exports are projected to rise by 4-9 percent across all regions outside North America as trade is redirected. At the same time, US imports from China are expected to fall sharply, creating new export opportunities for other suppliers able to fill the gap.
WTO economists expect world GDP to grow by 2.2 percent in 2025, before slightly recovering to 2.4 percent in 2026. Tariff changes are forecast to have the largest impact on the economy of North America (-1.6 percentage points), followed by Asia (-0.4 points) and South and Central America and the Caribbean (-0.2 points). Although the imposition of reciprocal tariffs would have a limited effect on the global figure, a wider spread of trade policy uncertainty could nearly double the GDP loss to 1.3 percentage points relative to the baseline.
