^{Source: France 24}

Rising Tariffs Threaten Global Trade Stability

The World Trade Organization (WTO) has issued a stark warning that escalating U.S. tariffs, particularly those targeting China, are poised to reverse global trade growth in 2025. The WTO now forecasts a 0.2% decline in world merchandise trade for the year, a significant downgrade from earlier projections of 2.7% growth. If trade tensions worsen, the decline could deepen to 1.5%, marking the steepest contraction since 2020. ​

U.S. Tariff Policies and Their Global Impact

President Donald Trump's administration has implemented aggressive tariff measures, including a 10% general tariff on imports and a 145% tariff on Chinese goods. These actions have prompted retaliatory tariffs from affected countries, notably China, which has imposed duties of up to 125% on U.S. imports. The WTO criticizes these measures for violating the "most favored nation" principle and warns of their detrimental effects on global trade dynamics. ​

Regional Disparities and Trade Diversion

The impact of these tariffs is expected to vary across regions. North America is projected to experience a significant downturn, with exports forecasted to drop by 12.6% and imports by 9.6% in 2025. Conversely, regions like Asia and Europe may see modest trade growth, although less than previously anticipated. The disruption in U.S.-China trade is likely to lead to trade diversion, with Chinese exports increasing by 4% to 9% in regions outside North America, potentially benefiting least-developed countries that can fill the gap left by reduced U.S. imports. ​

Economic Consequences and Global Growth Outlook

The WTO's revised forecast indicates that global GDP growth could slow from the projected 2.8% to 2.2%, or even lower to 1.5% under a worst-case scenario. The World Bank echoes these concerns, warning that U.S. tariffs could reduce global economic growth by 0.3 percentage points if trading partners retaliate. Such a scenario would also diminish U.S. GDP by up to 0.9%. ​‍

Outlook and Recommendations

While a temporary 90-day suspension of some tariffs has been announced to facilitate negotiations, the WTO emphasizes the need for sustained efforts to resolve trade disputes. The organization urges countries to adhere to established trade rules and engage in constructive dialogue to prevent further economic fragmentation. Failure to do so could result in long-term damage to the global trading system and hinder economic recovery.​

‍