Money

WTO: Trump Tariffs to Shrink Global Trade by 0.2% in 2025

APR 16 2025·Updated APR 17 2025

Story

Above: A globe with a U.S. flag with the inscription "tariffs" planted on it. Image credit: Joel Saget/Contributor/AFP via Getty Images

The Facts

On Wednesday, the World Trade Organization (WTO) revised its 2025 trade forecast from 2.7% growth to a 0.2% decline, primarily due to U.S. President Donald Trump's implementation of widespread tariffs, including a 145% levy on Chinese imports and a baseline 10% tariff on most other countries.
Guardian
The New York Times
Wsj
According to the WTO, North American trade is projected to experience the most severe impact, with exports set to decrease by 12.6% and imports by 9.6%. Meanwhile, Asia and Europe are still expected to maintain modest growth in both import and export volumes.
Global Trade Review (GTR)
WTO
The trade tension between the U.S. and China is expected to result in "significant trade diversion," with Chinese exports projected to increase by 4% to 9% across non-North American regions as Beijing seeks alternative markets.
CNBC
The New York Times
Wsj
A temporary 90-day pause on reciprocal tariffs was implemented, but the WTO warns that if these tariffs return and policy uncertainty spreads, global trade could face an even steeper 1.5% decline. Meanwhile, the WTO forecasts services trade to grow by 4% in 2025, one percentage point less than expected.
Global Trade Review (GTR)
BBC News
The WTO projects that decoupling the U.S.-China economies could lead to an 81-91% reduction in bilateral trade between the two nations, potentially reducing global GDP by 7% in the long term. Trade is forecast to rebound by 2.5% in 2026.
www.ft.com
EuroNews
Bloomberg.com
The WTO's forecast comes the same day a Bank of Canada scenario warned that if U.S. tariffs trigger a global trade war, inflation in Canada would increase and the country would see a recession. Last month, the Bank of England warned that Trump's tariffs would "put downward pressure" on the UK economy.
CBC
BBC News
Financial Post

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The Spin

Pro-Trump narrative

The Trump administration's options are limited, given that the Biden administration left the U.S. a giant fiscal mess. Trump's tariffs will help bring manufacturing back to the U.S., boost the domestic economy, and address the trade imbalances that have led to overdependence on specific markets, particularly in critical sectors like semiconductors. Trump's trade policy isn't a fiscal policy; it's a fiscal necessity, a detox for the overheated financial system.

New York Post

FOX News

Anti-Trump narrative

Trump's so-called America First strategy will make everything more expensive for ordinary Americans and small businesses. His protectionist measures will backfire by impairing global economic growth, disrupting supply chains, and particularly impacting vulnerable developing economies. Soaring U.S. tariffs and broader trade policy uncertainty would hammer international commerce, sharply deteriorate global trade, and potentially trigger a global recession.

The New York Times

The Hill