WTO Sees Fall In Trade Flows, Warns Of Further Downturn

(MENAFN- Kuwait News Agency (KUNA)) GENEVA, April 16 (KUNA) -- The World Trade Organization (WTO) expected, Wednesday, the decline of global goods trade by 0.2 percent in 2025, revising its earlier forecast down by three points, while warning that escalating trade tensions could push the contraction as deep as 1.5 percent.
In its latest "Global Trade Outlook and Statistics" report, WTO highlighted growing concerns over the intensifying rifts between the United States and China, noting that such tension could trigger serious downside risks, especially drop in Chinese exports to North America and a rise in its competitiveness across new markets, raising alarm among other economies.
WTO Director-General Ngozi Okonjo-Iweala expressed deep concerns over the increase of uncertainty of global trade policies, adding that "the recent de-escalation of tariff tensions has temporarily relieved some of the pressure on global trade."
The report explained that reciprocal tariffs could lower merchandise trade volume growth by 0.6 percent while trade policy uncertainty could reduce growth by an additional 0.8 percent resulting in a total contraction of 1.5 percent under a worst-case scenario.
North America is likely to see a steep drop in trade, with exports forecast to fall by 12.6 percent and imports by 9.6 percent in 2025, potentially dragging global goods trade growth down by 1.7 percentage point.
Meanwhile, a sharp decline in US imports from China could open up new export opportunities for alternative suppliers able to fill the gap.
The report also expected Chinese exports to grow between four and nine percentage points across all regions outside North America, signaling a significant realignment of global trade flows.
Asia is projected to see moderate growth of 1.6 percent in both exports and imports, while Europe's exports and imports are forecast to rise by 1.0 percent and 1.9 percent, respectively.
The report emphasized that both Asia and Europe continue to contribute positively to global trade growth, owing partly to their role as major energy product suppliers.
WTO warned that the slowdown could extend to the services sector, which, despite being less directly affected by tariffs, is expected to grow by only 4.0 percent in 2025.
Separately, the United Nations Conference on Trade and Development (UNCTAD) warned in a new report of a global economic slowdown, forecasting a drop in growth to 2.3 percent in 2025 amid rising trade tensions and deepening uncertainty weighing on global markets. (end)
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