Global Trade Faces Decline Amid Tariff Tensions

The World Trade Organisation predicts a decline in global merchandise trade by 0.2% in 2025 due to US-China tariff tensions. This drop may exacerbate to 1.5% under deteriorating conditions, affecting least-developed countries, and hindering goals like India's $2 trillion export target by 2030.

The World Trade Organisation (WTO) has announced an anticipated decline in global merchandise trade by 0.2% in 2025, citing high tariff impositions between the US and China. These deterrents are expected to dampen export-oriented economies, notably impacting the least-developed nations.

The WTO Secretariat's Global Trade Outlook and Statistics report warns that under current conditions, global trade will fall nearly three percentage points below a low tariff baseline scenario. This bleak forecast comes as a blow to countries like India, which aims to achieve $2 trillion in goods and services exports by 2030.

WTO Director-General Ngozi Okonjo-Iweala expressed serious concerns over the ongoing trade policy uncertainties. She highlighted that although recent de-escalations have temporarily reduced pressure, the threat looms large, with potential reinstatement of reciprocal tariffs potentially further shrinking global trade by 1.5% in 2025.

(With inputs from agencies.)