Global trade and growth projections lowered as trade tensions escalate
According to the latest reports from leading international organizations, rising trade tensions and policy uncertainty are casting a significant shadow over the global economic outlook.
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Rising trade tensions and policy uncertainty are casting a shadow over the global economic landscape, as outlined in the latest reports from prominent international organizations.
The World Trade Organization (WTO) anticipates that the volume of global merchandise trade will shrink by 0.2 percent in 2025 if current tariff conditions remain, which represents a decline of nearly 3 percentage points from previous forecasts based on a "low tariff" scenario, according to the latest Global Trade Outlook and Statistics report released on Wednesday.
The WTO issued a warning about significant downside risks stemming from the reinstatement of U.S. "reciprocal tariffs" and the ripple effects of trade policy uncertainty, forecasting a potential further decline of 1.5 percent in global goods trade in 2025.
The organization highlighted considerable regional variations in the impact of recent tariff measures as of April 14. North America is predicted to experience a "particularly steep" decline in goods trade, with exports estimated to drop by 12.6 percent. In contrast, Asia is expected to see modest trade growth, with exports and imports both projected to rise by 1.6 percent. Europe is forecasted to witness a 1.0 percent increase in exports and a 1.9 percent rise in imports.
WTO Director-General Ngozi Okonjo-Iweala noted that trade policy uncertainty could "act as a brake on global growth," potentially inflicting severe negative effects on the entire world, especially on the most vulnerable economies.
During a press conference discussing the report, the WTO chief emphasized the serious consequences that could arise from a reinstatement of the "reciprocal tariffs" and advocated for the exemption of the least developed countries from such measures.
In a separate report released on Wednesday, the United Nations Conference on Trade and Development (UNCTAD) indicated that the global economy is trending towards recession, predicting that growth will slow to 2.3 percent in 2025 due to escalating trade tensions and an unprecedented level of policy uncertainty.
UNCTAD's Trade and Development Foresights 2025 report elaborated on how rising trade tensions are influencing global trade dynamics, noting that high levels of trade policy uncertainty are causing delays in investment decisions and curtailing hiring.
The organization voiced concerns about the effects of the economic slowdown on developing nations, particularly the most vulnerable economies. Nevertheless, UNCTAD highlighted the resilience offered by the growth of South-South trade, which now accounts for about one-third of global trade, presenting an opportunity for many developing countries to buffer against uncertainty.
The report also mentioned that China’s economic development has been fostering "a steady growth of South-South trade," emphasizing that the potential for economic integration among developing nations holds significant promise.
Sanya Singh contributed to this article for TROIB News
The World Trade Organization (WTO) anticipates that the volume of global merchandise trade will shrink by 0.2 percent in 2025 if current tariff conditions remain, which represents a decline of nearly 3 percentage points from previous forecasts based on a "low tariff" scenario, according to the latest Global Trade Outlook and Statistics report released on Wednesday.
The WTO issued a warning about significant downside risks stemming from the reinstatement of U.S. "reciprocal tariffs" and the ripple effects of trade policy uncertainty, forecasting a potential further decline of 1.5 percent in global goods trade in 2025.
The organization highlighted considerable regional variations in the impact of recent tariff measures as of April 14. North America is predicted to experience a "particularly steep" decline in goods trade, with exports estimated to drop by 12.6 percent. In contrast, Asia is expected to see modest trade growth, with exports and imports both projected to rise by 1.6 percent. Europe is forecasted to witness a 1.0 percent increase in exports and a 1.9 percent rise in imports.
WTO Director-General Ngozi Okonjo-Iweala noted that trade policy uncertainty could "act as a brake on global growth," potentially inflicting severe negative effects on the entire world, especially on the most vulnerable economies.
During a press conference discussing the report, the WTO chief emphasized the serious consequences that could arise from a reinstatement of the "reciprocal tariffs" and advocated for the exemption of the least developed countries from such measures.
In a separate report released on Wednesday, the United Nations Conference on Trade and Development (UNCTAD) indicated that the global economy is trending towards recession, predicting that growth will slow to 2.3 percent in 2025 due to escalating trade tensions and an unprecedented level of policy uncertainty.
UNCTAD's Trade and Development Foresights 2025 report elaborated on how rising trade tensions are influencing global trade dynamics, noting that high levels of trade policy uncertainty are causing delays in investment decisions and curtailing hiring.
The organization voiced concerns about the effects of the economic slowdown on developing nations, particularly the most vulnerable economies. Nevertheless, UNCTAD highlighted the resilience offered by the growth of South-South trade, which now accounts for about one-third of global trade, presenting an opportunity for many developing countries to buffer against uncertainty.
The report also mentioned that China’s economic development has been fostering "a steady growth of South-South trade," emphasizing that the potential for economic integration among developing nations holds significant promise.
Sanya Singh contributed to this article for TROIB News
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