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World Trade Organization says global
trade could slide this year because of Trump's tariff policies
[April 17, 2025]
GENEVA (AP) — The World Trade Organization says the volume of
trade in goods worldwide is likely to decrease by 0.2% this year due to
U.S. President Donald Trump’s shifting tariff policies and a standoff
with China, but it would take a more severe hit if Trump carries through
on his toughest “reciprocal” tariffs.
The decline in trade will be particularly steep in North America even
without the stiffest tariffs, the global trade forum said Wednesday,
with exports there this year expected to fall by 12.6% and imports by
9.6%.
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Ngozi Okonjo-Iweala, left, Director-General of the WTO and Ralph Ossa,
right, Chief Economist at the World Trade Organization (WTO), speak to
media about this WTO's "Global Trade Outlook and Statistics - April
2025" during a press conference at the headquarters of the World Trade
Organization in Geneva, Switzerland, Wednesday, April 16, 2025. (Martial
Trezzini/Keystone via AP) |
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The
WTO based its report on the tariff situation as of Monday.
Initially, 2025 and 2026 were expected to have continued
expansion of world trade, but Trump’s trade war forced WTO
economists to substantially downgrade their forecast, the forum
said.
Trade in goods worldwide would slump by 1.5% if Trump follows
through on his stiffest tariffs on most nations, due to the
uncertainty unsettling businesses.
Trump suspended the toughest set of tariffs for 90 days earlier
this month so more than 70 countries have a chance to address
U.S. trade concerns. Meanwhile, he is increasing taxes on
Chinese imports to 145% and engaging in a lengthy back and forth
with Canada and Mexico about tariffs on their goods.
Despite the 90-day pause, “the enduring uncertainty threatens to
act as a brake on global growth, with severe negative
consequences for the world, the most vulnerable economies in
particular,” WTO Director-General Ngozi Okonjo-Iweala said in a
statement.
“Our simulations show that trade policy uncertainty has a
significant dampening effect on trade flows, reducing exports
and weakening economic activity,” WTO chief economist Ralph Ossa
said in the statement. “Moreover, tariffs are a policy lever
with wide-ranging and often unintended consequences. In a world
of growing trade tensions, a clear-eyed view of those trade-offs
is more important than ever."
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