FX.co ★ WTO Cuts 2025 Trade Growth Forecast on Trump Tariff Risks

The World Trade Organization (WTO) has issued a warning that global trade could contract by as much as 1.5% in 2025, should the aggressive tariff strategies employed by Donald Trump result in significant trade uncertainty. This marks a significant shift from the organization's previous growth forecast of 2.7%. The WTO, headquartered in Geneva, now anticipates a 0.2% decrease in goods trade, attributing this to rising tariffs and the unpredictable nature of U.S. trade policies. In the direst scenario envisioned, global GDP growth could fall to 1.7%, down from the previously anticipated 2.8%, with trade flows involving the United States particularly impacted. The WTO is contemplating convening an emergency meeting to tackle the repercussions. Trump's policies, including a 10% universal tariff and duties as high as 145% on Chinese goods, automobiles, and steel, are key factors contributing to the disruption. Despite this, non-U.S. trade might continue to grow modestly, but the overall outlook has "deteriorated sharply," according to the organization.