WTO, Due to Trump's Tariff Impact, Global Trade Projected to Decrease by 0.2% This Year
Ngōzī Okonjo-Iweala WTO Director-General holding press conference on the 16th (Source: AFP)
World Trade Organization (WTO) has stated that President Donald Trump's large-scale tariff policy is negatively impacting global trade flows, and forecasts a decrease in global trade volume this year. WTO predicted that even by reflecting only the current basic tariff being implemented, global trade would decrease by 0.2%, and warned that if mutual tariffs are fully applied, it could shrink by up to 1.5%.
In its 'Global Trade Outlook and Statistics' report released on the 16th (local time), WTO stated that if the 10% basic tariff applied by the US to most of its trading partners is maintained, this year's global trade volume would decrease by 0.2% compared to the previous year. This figure is reduced by 3.2 percentage points from the initially expected 3.0% growth. The report also analyzed that if the mutually deferred tariffs implemented for 90 days take effect, an additional decrease of 0.6 percentage points would occur, and if trade policy uncertainty expands, a further decrease of 0.8 percentage points could occur.
Ultimately, if both factors become a reality, WTO assessed that global trade volume could contract by 1.5% this year. This could be recorded as the largest decrease since 2020, when the COVID-19 pandemic hit the economy.
Particularly, by region, North America is expected to suffer the greatest impact. WTO predicted that exports in the North America region would decrease by 12.6% and imports by 9.6%, whereas Asia and Europe are expected to maintain growth, albeit at a slowed pace. In China, while exports to the US focused on textiles, electronic devices, etc. are projected to sharply decrease, exports to other regions could increase by 4-9%.
Ngōzī Okonjo-Iweala WTO Director-General said during a press conference, “The uncertainty of trade policies and the decoupling between the US and China is a very concerning situation,” and warned that if the world is divided into two economic blocks, the global GDP could decline by 7% in the long term.
World Bank President Ajay Banga also pointed out that “Trade tensions and uncertainties are leading to a global economic slowdown”, adding that the uncertainties brought by the tariff war could lower the overall growth rate of the global economy. The World Bank has presented this year’s global economic growth rate as 2.7%, but has warned of additional downward pressures.
This WTO report is interpreted as a signal that President Trump's tariff policy, beyond short-term losses, poses a structural threat to the global trade order and economic stability.