The World Trade Organization (WTO) on the 7th (local time) sharply downgraded its forecast for next year's global merchandise trade growth, reflecting the fallout from the tariff war sparked by U.S. President Donald Trump.
According to Reuters and the New York Times (NYT), the WTO issued a report that day and announced a forecast of 0.5% for next year's global merchandise trade growth. That is far lower than the 1.8% growth forecast released in Aug. The WTO projected that trade growth will slow next year as the impact of tariff increases persists.
WTO Director-General Ngozi Okonjo-Iweala said at a press conference at the organization's headquarters in Geneva, Switzerland, that day, "The tariff measures have been pushed back to the latter half of this year, and especially into next year, but they are weighing on trade," adding, "The outlook for next year is bleak." However, the WTO projected this year's trade growth at 2.4%, an upward revision from Aug. (0.9%).
The WTO explained that this was because countries refrained from responding to U.S.-origin tariffs and did not immediately resort to retaliation. In particular, the volume of global merchandise trade in the first half of this year rose 4.9% from the same period last year. The WTO assessed that this was due to increased exports and imports before the tariffs took effect and the expansion of demand for semiconductors and artificial intelligence (AI).