Freight ships and containers in the port of Qingdao in the province of Shandong in East China on December 4, 2024.
Stringer | AFP | Getty pictures
The world trade organization warned on Wednesday that the outlook for the global trade according to the regime of US President Donald Trump had “deteriorated”.
“The prospects for global trade have deteriorated greatly due to an increase in tariffs and trade policy uncertainty,” said the WTO in its latest “global trade view and statistics” report on Wednesday.
Based on the currently applicable tariffs and including a 90-day suspension of “mutual tariffs”, the volume of the world trade in the world model in 2025 will probably decrease by 0.2% before giving a “modest” recovery of 2.5% in 2026.
It is expected that the decline in North America is particularly steep, where exports are to decrease by 12.6% this year.
The WTO also warned that “there are severe downward risks”, including the use of “mutual” tariffs and a wider spillover of political uncertainty “, which could lead to an even sharper decline of 1.5% in global trade in goods, which was particularly injured export -oriented, least developed countries.
The latest tariff disorders follow a strong year for world trade in 2024, in which trading in goods rose by 2.9% and the trade in commercial services increased by 6.8%, said the WTO.
The new estimate of a decline in world trade by 0.2% for 2025 is almost 3 percentage points lower than under a “low tariff” base scenario.
“The risks of the forecast include the implementation of the currently suspended mutual tariffs of the United States and a wider spillover of the uncertainty of trade policy that go beyond the US trade relationships,” said the WTO.
“If they entered into force, mutual tariffs would reduce the worldwide commercial growth by additional percentage points and pose special risks for the least developed countries (LDCs), while the distribution of the uncertainty of trade policy (TPU) would increase a further 0.8 percent percentage. The distribution tariff and the spread of TPUs with 1.5%. TPU distribution of 1.5%.
On April 2, 2025, US President Donald Trump delivers the tariffs in the rose garden of the White House in Washington, DC.
Carlos Barria | Reuters
Trump fascinated trading partners and global markets at the beginning of April when he announced a number of so -called mutual tariffs for imports from more than 180 countries. Beijing was hit most hardest by everyone, with the US obligation to be in Chinese imports a total of 145%. China, in turn, struck in Washington with retaliation tariffs of up to 125% for US imports.
The tariffs between China and the USA will probably lead to a “drastic contraction” of trade between the two, said Ralph Ossa, chief economist of the WTO, on Wednesday with Silvia Amaro from CNBC.
The widespread market turbulence after the announcement of the tariffs led to a temporary rise from Trump by Trump. Last week, the President announced that the new tasks for imports of most trading partners would be reduced to 10% for 90 days to enable trade negotiations with colleagues in Washington.
In its Wednesday report, the WTO said that the effects of the latest changes in trade policy may vary greatly from region to region.
In the adjusted forecast, North America now subtracts 1.7 percentage points from the global merchandise growth in 2025, which makes the total negative.
In the meantime, Asia and Europe continue to contribute positively, but less than in the basic scenario, with the entrance to Asia halved to 0.6 percentage points.
The disorder in the US China trade will “trigger considerable trade distraction,” added the WTO, whereby the concerns between the third markets are triggered by the increased competition from China.
“The Chinese exports are expected to increase by 4% to 9% in all regions outside of North America when trading is redirected. At the same time, US imports from China are expected in sectors such as textiles, clothing and electrical devices that are able to fill the gap to fill the gap, and the trade organization that could increase.
Many WTO members have addressed the problem of the trade transfer, said Ossa.
“But one thing that is really important is that this is in a way a two-way street. If you think of European companies, for example try to export cars to the USA, you are now also faced with a tariff of 25% and must also find new target markets for these products.
Ossa added that it was important that these effects are treated in a cooperative way.
– Sophie Kiderlin from CNBC contributed to this report.
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