The World Trade Organization (WTO) has warned that global goods trade is now expected to shrink this year, driven by plummeting import and export figures from North America in the wake of the US’ tariff overhaul.
The WTO had initially forecast a continued steady expansion of trade in 2025 and 2026, but following the announcement of widespread tariffs on US imports and a barrage of retaliatory measures from the country’s trading partners, its economists have today issued a “substantial downgrade” to earlier predictions.
Globally, the volume of goods trade is now expected to fall by 0.2% this year, after growing 2.9% last year. The decline is largely driven by North America, which is set to see exports slump by 12.6% and imports drop by 9.6%, the WTO says.
Its forecast is based on the tariff situation as of April 14, and the WTO adds there are additional “severe downside risks” if tensions escalate further.
The introduction of reciprocal tariffs or spillover effects from policy uncertainty “could lead to an even sharper decline of 1.5% in global goods trade and hurt export-oriented least-developed countries”, it says.
“I am deeply concerned by the uncertainty surrounding trade policy, including the US-China stand-off,” says WTO director-general Ngozi Okonjo-Iweala.
As of press time, US tariffs on the vast majority of imports from China stand at 145%, and China has retaliated with a 125% levy on imports from the US.
The WTO says this situation is expected to trigger significant trade diversion, with Chinese goods exports set to grow by between 4% and 9% across non-North American markets.
“At the same time, US imports from China are expected to fall sharply in sectors such as textiles, apparel and electrical equipment, creating new export opportunities for other suppliers able to fill the gap,” it says.
In some markets, concern is growing over increased competition from Chinese suppliers, it says, adding that least-developed countries that depend on exports are “particularly sensitive to external economic shocks”.
A 90-day pause on many proposed US tariffs, announced by President Donald Trump on April 9, has “temporarily relieved some of the pressure on global trade”, Okonjo-Iweala says.
However, ongoing uncertainty over longer-term trade policy still has a “significant dampening effect on trade flows”, adds WTO chief economist Ralph Ossa.
“Tariffs are a policy lever with wide-ranging, and often unintended consequences,” he says. “In a world of growing trade tensions, a clear-eyed view of those trade-offs is more important than ever.”
The forecast comes as UN Trade & Development warns the world economy “is on a recessionary trajectory, driven by escalating trade tensions and persistent uncertainty”.
In a report published today, the agency says global growth is now expected to slow to 2.3% this year as tariffs disrupt supply chains and undermine predictability.
“This is already translating into delayed investment decisions and reduced hiring,” it says.
