NextFin news, The World Trade Organization (WTO) announced on Tuesday, October 7, 2025, that global merchandise trade growth is expected to slow sharply in 2026 due to the delayed impact of tariffs imposed by former U.S. President Donald Trump. The Geneva-based trade body lowered its forecast for 2026 trade volume growth to 0.5%, down from a previous estimate of 1.8% made in August.
In contrast, the WTO raised its 2025 forecast for global goods trade growth to 2.4%, up from 0.9% earlier this year. This upward revision is attributed to accelerated imports by the United States ahead of tariff hikes and a surge in trade involving artificial intelligence (AI)-related products such as semiconductors, servers, and telecommunications equipment.
WTO Director-General Ngozi Okonjo-Iweala highlighted that the growth in 2025 was driven by "increased spending on AI-related products, a surge in North American imports ahead of tariff hikes, and strong trade among the rest of the world, particularly emerging economies." She noted that AI-related goods accounted for 42% of global trade growth in the first half of 2025, despite representing only 15% of total world trade.
Okonjo-Iweala also praised WTO members for largely refraining from imposing retaliatory tariffs against the United States, unlike the widespread protectionism seen during the 1930s Great Depression. She described the trade resilience in 2025 as a result of importers front-loading orders to avoid future tariff increases and the robust demand for AI-related capital goods.
However, the WTO warned that the outlook for 2026 is bleaker, with all regions expected to experience weaker import performance due to higher tariff rates and increased trade policy uncertainty. Okonjo-Iweala emphasized the significant uncertainty surrounding the global trade environment, stating, "there is so much uncertainty it is hard to be conclusive." The WTO's global GDP growth projections stand at 2.7% for 2025 and 2.6% for 2026.
The tariffs in question include a basic 10% tariff imposed by the Trump administration on imports from all countries since April 2025, with higher rates applied to certain economies. These tariffs have prompted importers, especially in the U.S., to accelerate purchases in 2025 to avoid higher costs, temporarily boosting trade volumes.
The WTO's report underscores the complex interplay between trade policy and global economic trends, highlighting how tariff measures can have delayed and uneven effects on international trade flows. The organization called on nations to "reimagine trade and together lay a stronger foundation that delivers greater prosperity for people everywhere."
Sources: World Trade Organization official statements, WTO Director-General Ngozi Okonjo-Iweala press conference on October 7, 2025; reports from Investment Executive, RTL Today, and Conflingo dated October 7, 2025.
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