WTO Global Trade Outlook and Statistics Report Summary

Global Trade Outlook and Statistics Report (April 16)

Overview

The WTO Secretariat's report highlights growing uncertainty in the global economy, leading to a sharp deterioration in world trade prospects. While 2024 saw strong trade performance, headwinds are expected due to rising tariffs and trade policy uncertainty.

Projections and Forecasts

• Decline in 2025: World merchandise trade volume is projected to decline by 0.2 percent in 2025. This is almost three percentage points lower than anticipated without recent policy shifts.
• Modest Recovery in 2026: A recovery of 2.5 percent is expected in 2026.
• Downside Risks: Potential implementation of suspended “reciprocal tariffs” by the United States could further decrease world trade. Broader spillover of trade policy uncertainty is also a concern.

Impact of Reciprocal Tariffs

• Enactment of reciprocal tariffs would reduce global merchandise trade growth by an additional 0.6 percentage points.
• Wider spread of trade policy uncertainty could cut growth by a further 0.8 percentage points.
• Combined, these risks could lead to a 1.5 percent decline in world merchandise trade volume in 2025.

Regional Impact

• North America: Projected to subtract 1.7 percentage points from global merchandise trade growth in 2025.
• Asia and Europe: Both regions will contribute positively but less than in the baseline scenario. Asia's contribution is halved to 0.6 percentage points.
• Other Regions: Africa, CIS, Middle East, and South/Central America/Caribbean's combined contribution declines slightly but remains positive.

China-United States Decoupling

• Tariffs exceeding 100 percent contribute to decoupling between China and the United States.
• Disruption in United States–China trade is expected to cause significant trade diversion.
• Chinese merchandise exports projected to rise by 4 to 9 percent across all regions outside North America.
• US imports from China are anticipated to fall sharply in sectors like textiles, apparel, and electrical equipment, creating opportunities for other suppliers.

Impact on Services Trade

• Global services trade is expected to be adversely affected, despite not being directly subject to tariffs.
• Decline in goods trade is likely to reduce demand for related services (e.g., transport, logistics).
• Broader uncertainty is likely to dampen discretionary spending on travel and slow investment-related services.
• Global services trade volume is forecast to grow by 4.0 percent in 2025 and 4.1 percent in 2026, below baseline projections of 5.1 percent and 4.8 percent, respectively.
• This report includes projections for commercial services trade in volume terms for the first time.

Impact on GDP

• World GDP is now expected to grow by 2.2 percent in 2025, 0.6 percentage points below the baseline prediction.
• GDP is projected to recover slightly to reach 2.4 percent in 2026.
• Regional GDP Impact: The largest impact will be in North America (down by 1.6 percentage points), followed by Asia (down by 0.4 percentage points), and South and Central America/Caribbean (down by 0.2 percentage points).
• Wider spread of trade policy uncertainty could nearly double the projected GDP loss, bringing it to 1.3 percentage points below the baseline scenario.

2024 Trade Performance

• World merchandise trade volume grew by 2.9 percent in 2024.
• Commercial services trade expanded by 6.8 percent.
• Global GDP grew by 2.8 percent at market exchange rates.
• 2024 was the first year since 2017 (excluding the post-COVID-19 rebound) in which merchandise trade growth outpaced GDP growth.

Trade Values

• Merchandise exports rose 2 percent to US\$ 24.43 trillion in value terms.
• Services exports increased 9 percent to US\$ 8.69 trillion, supported by strong global demand.

Importance of Broader International Community

• The trajectory of world trade will depend on the broader international community's response.
• 87 percent of global merchandise trade occurs outside the United States.
• Bilateral trade between the United States and China accounts for around 3 percent of global merchandise trade.
• Open, predictable, and cooperative trade policies are essential for trade and global economic resilience.