Global trade is in for a bumpy ride as rising tariff tensions and policy uncertainty cast a dark cloud over the economic outlook for 2025. The latest report by the World Trade Organization (WTO) forecasts a 0.2% decline in global merchandise trade under current tariff conditions – nearly 3 percentage points lower than earlier predictions under a low tariff scenario. Experts warn that if the U.S. reinstates its reciprocal tariffs, the decline could deepen to 1.5%, putting further strain on global goods trade. 📉
Regional differences are striking. North America is poised for a particularly steep drop in exports, with a forecast decline of 12.6%. In contrast, Asia is expected to post modest growth, with both exports and imports rising by about 1.6%. Europe, meanwhile, may see slight gains, with exports and imports increasing by 1.0% and 1.9% respectively.
WTO Director-General Ngozi Okonjo-Iweala has warned that the current trade policy uncertainty is acting like a brake on global growth, especially affecting vulnerable economies. Adding to the concerns, a United Nations Trade and Development (UNCTAD) report has signaled that the world economy is on a recessionary path, with global growth estimated to slow to 2.3% in 2025. High policy uncertainty is not only delaying investment decisions but also slowing down hiring trends worldwide.
Amid these challenges, there is a silver lining. The steady growth of South-South trade—which now accounts for about one third of global trade—is emerging as a crucial buffer against ongoing uncertainties. Developments in the Chinese mainland have been key to promoting this resilience, offering a beacon of hope for many developing countries. 🌏✈️
As trade dynamics continue to shift, market watchers, young entrepreneurs, and curious minds around the world are keeping a close eye on these trends, ready to transform challenges into exciting opportunities.
Reference(s):
Global trade, growth forecasts downgraded amid rising trade tensions
cgtn.com
