Donald Trump’s tariffs will send international trade into reverse this year, depressing global economic growth, theWorld Trade Organizationhas warned.In its latest snapshot of the global trading system, the Geneva-based institution says it had previously expected goods trade to expand by a healthy 2.7% this year. As a result of Washington’s trade policy, it is now forecasting a 0.2% decline.Presenting the forecasts, the WTO’s director general, Ngozi Okonjo-Iweala, said she was particularly concerned about the “decoupling” of the US andChina, calling it “a phenomenon that is really worrying to me”.She said trade between the two geopolitical rivals was expected to plunge by 81% – 91% without exemptions for tech products such as smartphones – saying this was “tantamount to a decoupling of the two economies” and would have, “far-reaching consequences”.Okonjo-Iweala said the WTO was canvassing its member countries about whether to convene an emergency meeting to discuss the situation.In its report, the organisation says: “The outlook for global trade has deteriorated sharply due to a surge in tariffs and trade policy uncertainty.” It had previously forecast global GDP growth of 2.8% for 2025, but now expects a weaker 2.2%.The US has imposed tariffs of 10% on all imports, with much higher rates for China totalling 145%, and on specific sectors including cars and steel. The WTO expects the biggest impact of the policy to be a sharp decline in trade with the US – with other regions still expected to see growth.Trump’s far larger, “reciprocal” tariffs werepaused last week for 90 daysafter a violent reaction in financial markets. The WTO warns that if these are reimposed after the hiatus, it would have a much greater impact, causing a 0.8% decline in global goods trade.If this was followed with an upsurge in “trade policy uncertainty” worldwide, as other countries readjust their policies in response, the WTO suggests the effects would then be an even greater 1.5% fall in trade. And in this worst-case scenario, the WTO predicts even weaker global GDP growth, of just 1.7%.After Trump’s “liberation day” tariff announcement on 2 April was followed by a string of sometimes apparently contradictory statements from Washington, the WTO warns that uncertainty in itself is an important contributor to the risks of a slowdown.“Uncertainty fosters an increased prudence in decision-making,” the WTO says, pointing to evidence that “trade policy uncertainty can, among other things, dampen business confidence, reducing business investment and thereby impairing economic growth.”It adds: “Ultimately, the degree to which uncertainty can be managed by firms will be a key determinant of whether the positive macroeconomic momentum observed in 2024 translates into sustained global trade growth in the coming years.”skip past newsletter promotionSign up toBusiness TodayFree daily newsletterGet set for the working day – we'll point you to all the business news and analysis you need every morningEnter your email addressSign upPrivacy Notice:Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see ourPrivacy Policy. We use Google reCaptcha to protect our website and the GooglePrivacy PolicyandTerms of Serviceapply.after newsletter promotionThe WTO predicts some “diversion” of trade, as Beijing seeks new markets for its goods outside the US. Chinese exports to regions outside North America are expected to expand by between 4% and 9%, in 2025.Services trade is not directly hit by Trump’s tariffs, but the WTO expects it to be affected indirectly. “Tariff induced declines in goods trade weaken demand for related services such as transport and logistics, while broader uncertainty dampens discretionary spending on travel and slows investment-related services,” it warns.The WTO acts as the watchdog for global trading rules, and has previously provided a forum for the negotiation of international trade deals – but its role has increasingly come into question in recent years, as the progress of globalisation has slowed.Trump’s tariffs have been applied in complete disregard to the “most favoured nation” rule that forms the bedrock of the system overseen by the WTO – which is meant to mean that trade advantages offered to one member-country should be extended to all.China has urged the WTO to investigate the impact of theTrump tariffs. Beijing said in a statement to the WTO last week: “Reciprocal tariffs are not – and will never be – a cure for trade imbalances. Instead, they will backfire, harming the US itself.”
Trump tariffs will send global trade into reverse this year, warns WTO
TruthLens AI Suggested Headline:
"WTO Warns Trump's Tariffs Could Reverse Global Trade Growth"
The Guardian
7.6
TruthLens AI Summary
The World Trade Organization (WTO) has issued a stark warning regarding the impact of Donald Trump's tariffs on global trade, predicting a significant reversal in international trade growth this year. Originally expecting a 2.7% increase in goods trade, the WTO now forecasts a 0.2% decline due to escalating trade tensions between the United States and China. WTO Director-General Ngozi Okonjo-Iweala expressed particular concern regarding the anticipated decoupling of the two economies, projecting a staggering 81% to 91% drop in trade between the US and China without exemptions for key technology products. This decoupling, she cautioned, could have profound and far-reaching consequences for the global economy. In light of these developments, the WTO is considering convening an emergency meeting to address the deteriorating trade outlook, which has been exacerbated by rising tariffs and increased policy uncertainty.
In addition to the immediate effects of tariffs, the WTO's report highlights the broader implications for global economic growth. The organization has revised its projections for global GDP growth down to 2.2% for 2025, compared to the earlier estimate of 2.8%. The imposition of tariffs, particularly the higher rates on imports from China and specific sectors such as steel and automobiles, is expected to have a disproportionate impact on trade with the US. Furthermore, should Trump’s larger “reciprocal” tariffs be reinstated after a temporary pause, the WTO warns of a potential 0.8% decline in global goods trade, with a worst-case scenario predicting a 1.5% drop. This uncertainty surrounding trade policies not only dampens business confidence but also negatively affects investment, which could hinder the macroeconomic momentum observed in 2024. The WTO’s findings underscore the complexities of global trade dynamics, as countries like China seek to diversify their markets while grappling with the implications of US trade policies, which seemingly violate the foundational principles of the WTO’s most favored nation rule.
TruthLens AI Analysis
The WTO's warning about the potential reversal of global trade due to Trump's tariffs presents a stark economic forecast, emphasizing the risks of escalating protectionism. The report highlights a shift from an expected 2.7% growth in goods trade to a 0.2% decline, attributing this downturn primarily to U.S. trade policies, particularly the decoupling from China. The dire projections—such as an 81–91% plunge in U.S.-China trade without tech exemptions—underscore the geopolitical tensions fueling economic fragmentation.
Economic and Geopolitical Implications
The WTO’s focus on "trade policy uncertainty" reflects broader anxieties about retaliatory measures and a potential domino effect. The 90-day pause on reciprocal tariffs offers temporary relief, but the threat of a 0.8% trade decline (or worse, 1.5% with global policy shifts) looms. This aligns with historical patterns where trade wars depress GDP growth—revised down from 2.8% to 2.2% for 2025. The car, steel, and tech sectors are immediate casualties, suggesting targeted volatility in related stocks and supply chains.
Audience and Agenda
The report likely aims to pressure policymakers by framing tariffs as a zero-sum game, appealing to multilateralists and export-dependent economies. It resonates with pro-globalization audiences—NGOs, centrist economists, and industries reliant on open trade—while subtly critiquing nationalist agendas. The call for an emergency WTO meeting signals urgency, possibly to preempt further fragmentation.
Manipulation and Reliability
The WTO’s stance isn’t neutral; it advocates for trade liberalization, which may color its dire warnings. The lack of counterarguments (e.g., potential benefits of reshoring) suggests a one-sided narrative. However, the data-driven projections lend credibility, even if the tone leans alarmist. The report’s timing—amid U.S. election rhetoric—hints at political messaging, though no overt AI manipulation is evident. Language models like Deepseek R1, if used, might amplify the decoupling narrative, but the core facts align with independent analyses.
Hidden Context
The subtext involves sidelining discussions about alternative economic strategies (e.g., regional trade blocs) and the WTO’s own declining relevance. By focusing on U.S.-China tensions, it diverts attention from structural issues like overreliance on tech exports or the environmental costs of globalized trade.
Market and Power Dynamics
Tariff-sensitive sectors (automakers, semiconductor firms) face instability, while domestic manufacturers may gain short-term traction. Geopolitically, the report reinforces the narrative of a bipolar world, with the WTO positioning itself as a stabilizing force amid U.S.-China rivalry.
Conclusion
The report is broadly reliable but framed to advocate for WTO-centric solutions. Its manipulative elements lie in selective emphasis rather than factual inaccuracies. The 7/10 reliability score reflects credible data with a pro-multilateral bias.