The World Trade Organization has warned that global trade faces a sharp comedown after the exuberance of early 2025. The familiar culprit is Donald Trump, whose aggressive new tariffs on US imports threaten to turn customs clearance into a virtual death sentence for cross-border commerce.
While global markets cheered an unexpectedly robust 2.4% uptick in trade, far surpassing the muted 0.9% forecast, analysts have cautioned that the exuberance may be short-lived. For 2026, the WTO projects trade growth will plunge to just 0.5%, a sharp downgrade from previous expectations of nearly 2%. The organization attributes this to Trump’s tariffs, which are gradually making their way through global supply chains. The full effects of the tariffs will likely be realized by next year.
Even developed economies have started to flash warning signs: manufacturing is stalling, business and consumer confidence are eroding, and wage and employment growth are losing steam. Overall, the financial outlook is becoming more pessimistic.
The unexpected lifeline for global trade in the first half of 2025 came from a surge in AI-related goods. Shipments of semiconductors, servers, and telecom equipment jumped 20%, infusing the market with renewed vigor. By contrast, sectors not tied to artificial intelligence only saw 4% growth. Remarkably, AI-linked technology represented less than a tenth of total trade volume, yet was responsible for nearly half of overall expansion.
However, the WTO leaves no doubt that 2026 will strike a very different note. The year will be marked by a global economic slowdown and the full brunt of Trump’s tariffs. In short, while the momentum from artificial intelligence may fade, the pressure from trade barriers will only intensify.
