Global Trade Prospects Darken: Policy Uncertainty and Surgin
2025-06-12 15:21
The World Trade Organization (WTO) highlighted in its latest Global Trade Outlook and Statistics Report that the global economy faces mounting uncertainty, with trade prospects deteriorating sharply. A mild recession is now projected for 2025.
The report forecasts a 0.2% decline in global merchandise trade volume in 2025, nearly 3 percentage points lower than the baseline scenario without policy changes. This marks a stark reversal from earlier optimistic expectations. North America is expected to be the primary drag, reducing global trade growth by 1.7 percentage points and pushing the sector into negative territory.
- Escalating Policy Risks Amplify Downturn Pressures
Global trade faces significant downside risks, including the potential reinstatement of U.S. "reciprocal tariffs"and the spillover of unilateral trade policies. Full implementation of such measures could trigger an additional 1.5% contraction in global goods trade, creating a vicious cycle of "policy shocks—trade contraction—confidence erosion."
- U.S.-China Decoupling and Trade Diversion
Persistent U.S.-China tariff conflicts have accelerated bilateral trade decoupling. China’s exports to non-North American markets are projected to grow by 4–9%, while U.S. imports of Chinese textiles, apparel, and electronics are set to plummet sharply.
- Indirect Impact on Services Trade
Though services trade is not directly subject to tariffs, its decline is inevitable. Reduced merchandise trade will dampen demand for related services like logistics, transportation, and tourism.
- Global Economic Chain Reactions
In 2024, global trade demonstrated resilience, with merchandise trade growing 2.9% and services trade expanding 6.8%—outpacing GDP growth (2.8%) for the first time since 2017 (excluding pandemic rebound years).
However, global GDP growth is now projected to slow to 2.2% in 2025, 0.6 percentage points below the baseline. North America will bear the brunt, with GDP growth decelerating by 1.6%, followed by Asia (0.4%) and South America/Caribbean (0.2%). Further policy uncertainty could nearly double global GDP losses.
- Multilateral Cooperation: The Key to Mitigating Crisis
The report emphasizes that global trade’s future hinges not on individual economies or bilateral relations but on international cooperation. 87% of global merchandise trade occurs outside North America, while U.S.-China bilateral trade represents just 3%of total trade. Open, predictable, and collaborative trade policies are critical to sustaining global economic resilience.
Amid these challenges, nations must prioritize multilateral solutions to avoid further policy conflicts and ensure stable, sustainable growth.