Despite Trump’s Tariff War, WTO Raises 2025 Global Trade Growth Forecast To 2.4%

…Cuts 2026 Outlook To 0.5%

The World Trade Organisation (WTO) has revised upward its forecast for global merchandise trade growth in 2025 to 2.4 per cent, from an earlier projection of 0.9 per cent, citing a surge in artificial intelligence (AI)-related exports and accelerated shipments to the United States ahead of new tariff hikes.

However, the organisation warned of a sharp slowdown in 2026, slashing its trade growth outlook to 0.5 per cent from the 1.8 per cent it predicted in August, as the full effects of US trade restrictions under President Donald Trump’s administration begin to weigh on global commerce.

According to the WTO’s updated Global Trade Outlook released on Tuesday, global merchandise trade volumes “outpaced expectations in the first half of 2025”, supported by robust consumer and industrial demand for AI-driven technologies, strong import activity in North America, and resilient trade among emerging markets.

The trade body noted that the latest forecast revision marks one of several updates this year, underscoring the uncertainties surrounding the economic impact of Washington’s new tariff measures.

Since returning to office in January, President Donald Trump has imposed multiple rounds of import duties, including a baseline tariff of 10 per cent on all countries and significantly higher rates on select economies and sectors.

“Countries’ measured response to tariff changes in general, the growth potential of AI, as well as increased trade among the rest of the world, particularly among emerging economies, helped ease trade setbacks in 2025,” WTO Director-General Ngozi Okonjo-Iweala said in Geneva.

The former Nigerian finance minister cautioned, however, that the apparent resilience of global trade this year should not lull policymakers into complacency.

“Today’s disruptions to the global trade system are a call to action for nations to reimagine trade and together lay a stronger foundation that delivers greater prosperity for people everywhere,” she added.

Beyond trade flows, the WTO projected that global gross domestic product (GDP) would grow by 2.7 per cent in 2025, slightly easing to 2.6 per cent in 2026.

The organisation emphasised that while innovation and AI-related investments have bolstered industrial demand in the short term, rising trade tensions and protectionist policies could undermine global supply chains and growth momentum going forward.

Analysts say the WTO’s latest outlook reflects both the promise and peril of a shifting global economy, where technological transformation and geopolitical risks are now moving in tandem.