A. M. The outlook for world trade has deteriorated sharply due to the recent increase in tariffs and the growing climate of uncertainty surrounding international trade policy, according to the latest report from the World Trade Organization (WTO). The entity anticipates a -0.2% contraction in the volume of world merchandise trade in 2025, following growth of 2.9% in 2024.
This change in trend represents a significant revision to previous WTO estimates, which predicted a sustained expansion of trade in the coming years. The new tariff measures, coupled with the suspension of “reciprocal tariffs” by the United States, have led the agency’s economists to adjust their forecasts, now projecting a moderate recovery of 2.5% in 2026.
In contrast, commercial services trade will also suffer a slowdown, from 6.8% growth in 2024 to 4.0% in 2025, with a slight improvement to 4.1% in 2026. In the absence of these trade policy changes, the WTO estimates that merchandise trade would have grown by 2.7% in 2025 and 2.9% in 2026.
The report warns that the reinstatement of reciprocal tariffs by the United States, along with the spread of trade uncertainty to other economies, could reduce world merchandise trade by as much as an additional 1.5% in 2025. This scenario would have particularly negative impacts for least developed countries (LDCs).
