The World Trade Organization (WTO) has forecast that global trade will fall this year because of US President Donald Trump’s tariffs.
It added “severe downside risks”, including reciprocal tariffs and political uncertainty, could lead to an even sharper decline in global goods trade.
“The decline is expected to be particularly steep in North America,” the WTO said, forecasting trade to drop by more than a tenth in that region.
Ngozi Okonjo-Iweala, the WTO director general, called the “decoupling” of the US and China “a phenomenon that is really worrying to me”.
The WTO previously expected global goods trade to expand by 2.7% in 2025 but it now forecasts it will fall by 0.2%.
Chief economist Ralph Ossa said: “Tariffs are a policy lever with wide-ranging, and often unintended consequences.
“Our simulations show that trade policy uncertainty has a significant dampening effect on trade flows, reducing exports and weakening economic activity,” he added.
Also on Wednesday, the UN trade and development body, UNCTAD, released its own report which forecasts global growth to slow to 2.3% in 2025 due to escalating trade tensions and uncertainty.
It said the projection was below “the 2.5% threshold widely viewed as signalling a global recession”.