By Daniel Brouse
April 16, 2025
The World Trade Organization (WTO) highlighted significant concerns regarding the impact of U.S. tariff policies on the global economy, with North America experiencing the most pronounced negative effects.
Global Trade Outlook Deteriorates
The WTO has revised its 2025 forecast for global merchandise trade, now predicting a 0.2% decline, a sharp downgrade from the previous estimate of 3.0% growth. This adjustment is primarily attributed to escalating U.S. tariffs under President Donald Trump and the intensifying trade disputes, particularly with China.
North America Faces Significant Trade Contraction
The WTO reports that North America is expected to bear the brunt of these trade tensions, with projections indicating a 12.6% decrease in exports and a 9.6% reduction in imports. These figures suggest a substantial contraction in trade activity within the region.
Potential for Deeper Economic Impact
Should the U.S. implement its most severe proposed tariffs, the WTO warns that global trade could contract by up to 1.5%, potentially leading to broader economic downturns. The organization emphasizes that such measures could have long-term implications, including a potential decoupling of the U.S. and Chinese economies, which might shrink global GDP by up to 7%.
Call for Multilateral Engagement
WTO Director-General Ngozi Okonjo-Iweala has urged member countries to engage in dialogue and utilize the organization’s dispute resolution mechanisms to address trade disagreements. She cautions against unilateral tariff implementations, highlighting the risk of triggering retaliatory measures that could exacerbate global economic challenges.
In summary, the WTO’s analysis underscores the significant risks posed by current U.S. tariff policies, particularly for North America, and calls for collaborative efforts to mitigate potential adverse effects on the global economy.