2025 trade growth to rise but tariffs to bite next year

GENEVA — The World Trade Organization on Tuesday raised its forecast for global merchandise trade growth in 2025 to 2.4 percent, up from its previous projection of 0.9 percent made in August.

Meanwhile, the forecast for 2026 was revised downward to 0.5 percent from 1.8 percent.

The WTO attributed the performance to several factors, including frontloading of imports in North America ahead of expected higher tariffs imposed by the United States, disinflation and supportive fiscal policies, solid growth in emerging markets, and a surge in trade of AI-related goods.

The report stated that the volume of world merchandise trade, as measured by the average of exports and imports, increased by 4.9 percent year-on-year in the first half of this year.

Trade among developing economies also saw a notable rise. The value of South-South trade increased by 8 percent year-on-year in the first half of 2025, outpacing the 6 percent growth in overall global trade value.

AI-related goods, including semiconductors, servers and telecommunications equipment, played a particularly significant role, accounting for nearly half of total trade growth during the same six-month period. The trade value of such products increased by 20 percent year-on-year.

Uncertain future

In an unusual move, the global trade body has revised its estimates several times this year due to uncertainties of the tariffs.

According to the WTO's latest Global Trade Outlook and Statistics report, global GDP is projected to grow by 2.7 percent in 2025 and 2.6 percent in 2026.

Services export growth is now expected to slow from 6.8 percent last year to 4.6 percent in 2025, and further to 4.4 percent the year after.

The report predicted that all regions will experience weaker import performance in 2026 as higher tariff rates and heightened trade policy uncertainty take effect.

WTO Director-General Ngozi Okonjo-Iweala said that looking ahead to 2026, "the fact is there is so much uncertainty it is hard to be conclusive".

She said that despite the "stiff headwinds" from the US' unilateral actions and unprecedented rise in trade policy uncertainty, trade has shown resilience.

Agencies - Xinhua