The World Trade Organization (WTO) has forecast that global trade will fall this year because of US President Donald Trump's tariffs. It added "severe downside risks", including reciprocal tariffs and political uncertainty, could lead to an even sharper decline in global goods trade. "The decline is expected to be particularly steep in North America," the WTO said, forecasting trade to drop by more than a tenth in that region. Ngozi Okonjo-Iweala, the WTO director general, called the "decoupling" of the US and China "a phenomenon that is really worrying to me". The WTO previously expected global goods trade to expand by 2.7% in 2025 but it now forecasts it will fall by 0.2%. Chief economist Ralph Ossa said: "Tariffs are a policy lever with wide-ranging, and often unintended consequences. "Our simulations show that trade policy uncertainty has a significant dampening effect on trade flows, reducing exports and weakening economic activity," he added. Also on Wednesday, the UN trade and development body, UNCTAD, released its own report which forecasts global growth to slow to 2.3% in 2025 due to escalating trade tensions and uncertainty. It said the projection was below "the 2.5% threshold widely viewed as signalling a global recession". A baseline tariff of 10% on almost all foreign imports to the US kicked in on 5 April, although some countries and goods are exempt. China has a much higher tariff, which now totals 145% on most goods. The US stock market slid on opening on Wednesday with the big indexes falling amid the ongoing uncertainty. Despite the prediction of plunging trade with the US, the WTO expects some regions will still see trade growth. It said Asia and Europe were still projected to post modest growth in both exports and imports this year. "The collective contribution to world trade growth of other regions would also remain positive," the WTO report said. For the first time, the report contains a forecast for services trade - which is when countries buy and sell services to each other instead of goods. This is common in industries such as tourism or finance where nothing physical is shipped but a service is provided. The WTO forecasts services trade to grow by 4% in 2025, which is around one percentage point less than expected. Since Trump's inauguration in January there has been a flurry of announcements on tariffs. The US president says the import taxes will encourage US consumers to buy more American-made goods, increase the amount of tax raised, and lead to huge levels of investment in the country. However, critics say bringing manufacturing back to the US is complicated and could take decades and that the economy will struggle in the meantime. Trump has also backtracked on many of his announcements. Just hours after steep levies against roughly 60 of America's trading partners kicked in earlier this month, Trump announceda 90-day pauseon those tariffs to all countries bar China, in the face of mounting opposition from politicians and the markets. In March, the governor of the Bank of England has warned that Trump's tariffscould mean less moneyin UK consumers' pockets.
US tariffs will make global trade shrink, says WTO
TruthLens AI Suggested Headline:
"WTO Predicts Decline in Global Trade Due to US Tariffs"
Bbc News
7.4
TruthLens AI Summary
The World Trade Organization (WTO) has issued a concerning forecast regarding global trade, predicting a decline in trade volume this year largely attributed to tariffs imposed by the United States under President Donald Trump. The WTO has highlighted significant risks to trade, including the potential for retaliatory tariffs and ongoing political uncertainties, which could exacerbate the downturn in global goods trade. Specifically, the organization anticipates a more than ten percent drop in trade within North America. Ngozi Okonjo-Iweala, the WTO Director General, expressed deep concern over the 'decoupling' of the US and China, labeling it as a troubling phenomenon. Originally, the WTO had projected a 2.7% increase in global goods trade by 2025, but this outlook has now shifted to a 0.2% decrease. Chief economist Ralph Ossa emphasized that tariffs can have extensive and often unintended consequences, noting that trade policy uncertainty significantly dampens trade flows, leading to reduced exports and weakened economic activity.
In a related report, the United Nations Conference on Trade and Development (UNCTAD) also predicted a slowdown in global growth, estimating it would drop to 2.3% by 2025 due to rising trade tensions and uncertainty, which is below the 2.5% threshold commonly associated with the onset of a global recession. The WTO report also highlights that while trade with the US is expected to decline, regions such as Asia and Europe may still experience modest growth in exports and imports this year. Notably, the WTO has included forecasts for services trade for the first time, predicting a 4% growth by 2025, albeit slightly lower than previous estimates. The imposition of a baseline tariff of 10% on most foreign imports to the US began on April 5, with China facing even steeper tariffs of up to 145%. Despite the anticipated trade challenges, President Trump maintains that these tariffs will bolster American manufacturing and investment, although critics warn that reversing manufacturing trends is complex and will take time, potentially harming the economy in the interim.
TruthLens AI Analysis
The WTO's warning about the shrinking global trade due to US tariffs presents a multifaceted economic and political narrative. The report highlights the tangible consequences of trade policies, emphasizing the risks of decoupling between major economies like the US and China. Below is a detailed analysis of the implications, motivations, and potential manipulations within this news piece.
Economic Impact of Tariffs
The WTO's revised forecast, predicting a 0.2% decline in global goods trade instead of a 2.7% growth, underscores the disruptive effect of tariffs. The mention of "severe downside risks" and "reciprocal tariffs" suggests a domino effect, where protectionist policies could trigger broader economic slowdowns. The UNCTAD report’s projection of global growth slowing to 2.3% in 2025—below the recession threshold—further amplifies this concern. The data appears objective, but the framing leans toward critiquing US trade policies, potentially influencing public and investor sentiment against tariff escalations.
Political Undertones and Decoupling
Ngozi Okonjo-Iweala’s explicit worry about US-China decoupling signals the WTO’s alignment with multilateralism. By labeling decoupling "really worrying," the report implicitly critiques nationalist trade agendas. This aligns with broader institutional biases favoring globalization, which may resonate with pro-trade audiences but alienate protectionist factions. The selective focus on North America’s "steep" trade decline—while noting Asia and Europe’s resilience—could be interpreted as politically charged, emphasizing US policy failures.
Market Reactions and Hidden Agendas
The timing of the report, coinciding with US stock market dips, raises questions about its intent. Could this be a strategic release to pressure the US administration into reconsidering tariffs? The exemption of "some countries and goods" from US tariffs is underplayed, possibly to avoid diluting the narrative’s urgency. Meanwhile, China’s 145% tariff on US goods is mentioned without critique, hinting at a lopsided portrayal that may serve to deflect scrutiny from Beijing’s trade barriers.
Manipulative Language and AI Influence
The report’s language—phrases like "significant dampening effect" and "weakening economic activity"—tilts toward alarmism. While empirically grounded, the tone risks exaggerating short-term volatility into a systemic crisis. If AI models like Deepseek R1 were involved, their training on datasets prioritizing multilateralism might explain the anti-tariff slant. However, no overt AI hallmarks (e.g., unnatural phrasing) are evident, suggesting human editorial control with institutional biases.
Target Audiences and Global Power Dynamics
This news appeals to pro-globalization elites, economists, and policymakers advocating for free trade. It also targets investors sensitive to trade policy risks, particularly in sectors like manufacturing and logistics. By framing tariffs as a zero-sum game, the report subtly reinforces the WTO’s relevance in a polarized trade landscape, positioning itself as a neutral arbiter despite its ideological leanings.
Credibility Assessment
The report is factually credible, citing verifiable data from the WTO and UNCTAD. However, its selective emphasis and lack of counterarguments (e.g., potential long-term benefits of tariffs for domestic industries) reduce its neutrality. The manipulative score is moderate (6/10), driven by omission bias rather than overt falsehoods.