The WTO’s Global Trade Outlook for April 2025, published on Wednesday, 16 April, presents a grim view of international trade, one marred by reciprocal tariffs and fears of a worldwide trade war.
In its first report since Trump’s broad-ranging tariffs came into effect, the WTO revised its estimates of global trade volumes, forecasting they would fall by 0.2% in 2025 and pick up slightly in 2026, rising by 2.5%. In the October report, trade volumes were predicted to rise by 3% in 2025 after a strong 2.7% growth in 2024.
A forecasted 1.7% reduction in North American trade is largely responsible for the shift, while merchandise trade is expected to keep rising, albeit less than previous estimates, in the rest of the world. The most marked decrease is expected to be in Asian trade, now forecasted to only grow by 0.6% compared to the impressive 7.4% growth projected in the October report.
This comes as tariffs imposed by the Trump administration come into effect all over the world; while many of the headline-making country-specific tariffs have been halted for 90 days, the 10% baseline tariff remains for all exports to the US. Nevertheless, the trade uncertainty caused by the tariff announcements and fears of further tariffs on specific industries, like pharmaceuticals or metals, is responsible for the “significant reversal” in estimates, said the WTO.
US tariffs on China, the only ones not subject to the 90-day delay, currently stand at 145%, with a 125% reciprocal tariff levied by China on US goods. This is expected to lead to a sharp fall in US imports from China, creating opportunities for suppliers from emerging economies to fill the gap. Similarly, Chinese exports to all regions except North America are expected to rise by as much as 9% as goods are redirected outside the US.
If the currently suspended tariffs were to come into effect, they would lead to a further reduction of 0.6% in global trade, with emerging economies bearing the brunt of the effect. A rise in trade policy uncertainty, for example if more countries enacted reciprocal tariffs against the US, could lead to a further 0.8% decline, for a total of -1.5% trade growth in 2025.
The report marks the first time the WTO measures trade in services, a growing but oft-overlooked sector in global trade. Services trade is expected to grow significantly in 2025, but tariff-related uncertainty and a decrease in global trade will see it rise by just 4%, more than a percentage point below pre-tariff estimates.
