A cargo ship sits outside of the Port of Elizabeth marine terminal seen from Bayonne, New Jersey, U.S., April 9 2025.
Shannon Stapleton | Reuters
The World Trade Organization on Tuesday hiked its forecast for global trade growth in 2025, but warned the outlook for 2026 had deteriorated.
In its latest “Global Trade Outlook and Statistics” report published Tuesday, the WTO predicted that trade volume growth in 2025 would stand at 2.4%, up sharply from a previous estimate of 0.9% in the trade body’s August report.
The outlook for next year is not so rosy, however, with the organization slashing its previous expectation of 1.8% trade volume growth next year to a lackluster 0.5%.
“Trade growth is expected to slow in 2026 as the global economy cools and as the full impact of higher tariffs is finally felt for a full year,” the WTO said.
Trade tariffs have become a dominant feature, and headwind, for global commerce since U.S. President Donald Trump shocked friends and foes alike with his widescale tariffs regime in April.
Countries scrambled to reach trade deals with the White House but even allies, such as the U.K., have seen a baseline 10% tariff remain on goods exported to the U.S.
Front-loading imports
Global trade volumes rose sharply in the first half of 2025 — up 4.9% year on year — with several factors contributing to the robust expansion.
These included the front-loading of imports into the U.S. in anticipation of higher trade tariffs, and favorable macroeconomic conditions with disinflation, supportive fiscal policies and tight labor markets boosting real incomes and spending in major economies, the WTO said.
Strong growth in emerging markets and increased demand for artificial intelligence-related goods — including semiconductors, servers and telecommunications equipment — also fueled global trade growth, it added, with AI-related spending driving nearly half of the overall trade expansion in the first half of the year, rising 20% year on year in value terms.
Global competition when it comes to developing AI-related products has heated up.
The WTO noted that the U.S. accounted for roughly one-fifth of global AI-related trade growth in the first half of 2025. The bulk of the expansion came from Asia, however, which accounted for nearly two-thirds of global AI-related trade growth in the same time period.
“Trade growth spanned the digital value chain, from raw silicon and specialty gases to devices powering cloud platforms and AI applications,” the WTO said in its report, noting that “Asia’s export performance was strong in AI-related products, consistent with the worldwide surge in investment in this sector.”
A key downside risk to the latest forecast is the spread of trade-restrictive measures and policy uncertainty to more economies and sectors, WTO economists noted. On the upside, they said sustained growth in trade for AI-related goods and services could provide a medium-term boost to global trade.
Global services exports growth is expected to slow from 6.8% in 2024 to 4.6% in 2025 and 4.4% in 2026. Although not directly subject to tariffs, services trade can be affected indirectly through links to goods trade and output.
Sharp slowdown
Looking ahead, possible signs of weakness in trade and manufacturing output had already been observed in developed economies, including reduced business and consumer confidence and slower growth in employment and incomes, the WTO noted.
Commenting on the organization’s latest outlook, Director-General Ngozi Okonjo-Iweala said, “countries’ measured response to tariff changes in general, the growth potential of AI, as well as increased trade among the rest of the world — particularly among emerging economies — helped ease trade setbacks in 2025.”
“Trade resilience in 2025 is thanks in no small part to the stability provided by the rules-based multilateral trading system. Yet complacency is not an option.” she added.
“Today’s disruptions to the global trade system are a call to action for nations to reimagine trade and together lay a stronger foundation that delivers greater prosperity for people everywhere,” Okonjo-Iweala said.