A cargo ship sits outside the port of Elizabeth Marine Terminal off Bayonne, New Jersey, USA, April 9, 2025.
Shannon Stapleton | Reuters
The World Trade Organization on Tuesday raised its forecast for global trade growth in 2025, but warned that the outlook for 2026 had worsened.
In its latest Global Trade Outlook and Statistics report released on Tuesday, the WTO predicted trade volume growth would be 2.4% in 2025, rising sharply from a previous estimate of 0.9% in the trade body’s August report.
However, the outlook for next year is not so rosy as the organization lowered its previous expectations of 1.8% trading volume growth next year to 0.5%.
“Trade growth is expected to slow in 2026 as the global economy cools and the full impact of higher tariffs is finally felt for a full year,” the WTO said.
Trade tariffs have become a dominant feature and headwind for global trade since U.S. President Donald Trump shocked friends and foes alike with his broad-based tariffs in April.
The countries sought after trade deals with the White House, but even allies like Britain, have a base tariff of 10% on goods exported to the US
Subpoena imports
Global trade volumes rose sharply in the first half of 2025 – up 4.9% year-on-year – with several factors contributing to the robust expansion.
These included front-loading imports into the US in anticipation of higher trade tariffs and favorable macroeconomic conditions with disinflation, supportive fiscal policies and tight labor markets that are boosting real income and spending in major economies, the WTO said.
Strong growth in emerging markets and increased demand for goods related to artificial intelligence – including semiconductors, servers and telecommunications equipment – also fueled global trade growth, with AI-related spending accounting for nearly half of overall trade expansion in the first half, rising 20% in value terms.
Global competition in developing AI-related products has heated up.
The WTO found that the US accounts for approximately one-fifth of global AI-related trade growth in the first half of 2025.
“Trade growth spanned the digital value chain, from raw silicon and specialty gases to devices leading cloud platforms and AI applications,” the WTO said in its report, noting that “Asia’s export performance in AI-related products was strong, consistent with the global increase in investment in the sector.”
A key downside risk to the latest forecast is the spread of trade restriction measures and policy uncertainty for more economies and sectors, WTO economists have noted. On the other hand, she said continued growth in trade for AI-related goods and services could represent a medium-term increase in global trade.
Global services export growth is expected to slow from 6.8% in 2024 to 4.6% in 2025 and 4.4% in 2026. Although not directly subject to tariffs, services trade can be indirectly affected through links to the trade and production of goods.
Sharp slowdown
Looking at the prerequisites, signs of weakness in production and manufacturing of products have already been observed in developed economies.
Director-General Ngozi Okonjo-Iweala commented on the organization’s latest outlook: “Countries’ response to tariff changes in general, the growth potential of AI, as well as increased trade between the rest of the world – particularly among emerging economies – contributed to the trade setbacks of 2025.”
“The resilience of trade in 2025 is due in no small part to the stability of the rules of the multilateral trading system. However, complacency is not an option.” she added.
“Today’s disruptions to the global trading system are a call to action to reimagine trade and work together to build a stronger foundation that delivers greater prosperity to people everywhere,” Okonjo-iweala said.
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