The global trade outlook for 2025 has sharply deteriorated following the announcement and partial implementation of new US "reciprocal tariffs," often referred to as Trump tariffs. According to the WTO's Global Trade Outlook and Statistics 2025, the volume of world merchandise trade is now projected to contract by -0.2% in 2025, a stark reversal from the +2.9% growth seen in 2024. If trade policy uncertainty spreads further, the decline could deepen to -1.5%. Global GDP growth at market exchange rates is also expected to slow, falling from 2.8% in 2024 to 2.2% in 2025. North America will experience the heaviest losses, dragging global trade growth down by -1.7 percentage points, while Asia’s contribution to global trade growth is expected to shrink by half to +0.6 percentage points. Services trade, though less directly affected by tariffs, will also slow, with projected growth declining from 6.8% in 2024 to 4.0% in 2025. Despite the challenging environment, least-developed countries (LDCs) could see their merchandise export volume rise by 4.8%, benefiting from trade diversion effects as US importers seek alternatives to Chinese goods.

1. Global Trade Growth

• Merchandise Trade (goods):
  • 2024: +2.9% growth (volume).
  • 2025 (forecast): -0.2% contraction (due to new tariffs and trade policy uncertainty).
  • 2026 (forecast): +2.5% recovery.
• Commercial Services Trade:
  • 2024: +6.8% growth (volume).
  • 2025 (forecast): +4.0% growth.
  • 2026 (forecast): +4.1% growth.

2. Trade in Value Terms

• World Merchandise Exports (2024): US$ 24.43 trillion (+2% value growth).
• World Commercial Services Exports (2024): US$ 8.69 trillion (+9% value growth).

3. Leading Traders (2024)

• Top Merchandise Exporter: China (US$ 3.58 trillion).
• Top Merchandise Importer: USA (US$ 3.36 trillion).
• Top Services Exporter: USA (US$ 1.08 trillion).
• Top Services Importer: USA (US$ 787 billion).
• If counted as a single entity, EU had:
  • Exports: US$ 2.80 trillion (merchandise), US$ 1.64 trillion (services).
  • Imports: US$ 2.63 trillion (merchandise), US$ 1.44 trillion (services).

4. Regional Impact on Trade (2025 Forecast)

5. Risks to the Forecast

• If US reciprocal tariffs are reinstated → World trade could fall by an extra -0.6%.
• If trade policy uncertainty spreads → Another -0.8% cut.
• Combined → Trade may fall -1.5% in 2025.

6. Special Insights

• LDCs (Least-Developed Countries) may benefit from US-China trade tensions:
  • Their exports could grow by +4.8% in 2025 (adjusted forecast).
  • US seeks alternative suppliers for goods like textiles and electronics.

7. Global GDP Growth

• 2024: +2.8% growth.
• 2025 (forecast): +2.2% (adjusted down because of tariffs).
• 2026 (forecast): +2.4%.

8. Sector-Specific Services Growth (2025 Forecast)

9. Highlights from 2024 Performance

• Asia led transport service growth (+18%).
• Africa's travel exports grew +9%, led by countries like Tanzania (+19%).
• Computer services exports (e.g., AI, IT) grew +12% globally, reaching US$ 1 trillion.

Main Impacts of Trump Tariffs:

More Details:

• Trump Tariffs Structure:
  • +25% on many imports (especially cars, steel).
  • +145% extra on goods from China (excluding some electronics).
  • Reciprocal tariffs across all partners (except some exemptions)​.
• Trade Diversion:
  • Chinese exports drop 77% to the US.
  • Other Asian economies and LDCs like Bangladesh, Cambodia, and Lesotho benefit by supplying more to the US​.
• Regional Trade Shifts:
  • Asia ex-China gains some US market share.
  • Africa and LDCs modest gains in exports.
  • North America and Europe suffer from declining trade flows.

Trump Tariffs could cause a -1.5% fall in world merchandise trade, slow global GDP by -0.6%, severely hit North America, and create new export chances for some LDCs.

Global Trade and Economy Are Becoming More Fragile

• In early 2025, the world expected trade and economic growth to continue recovering after past shocks like COVID-19 and inflation.
• But new tariffs, especially the Trump "reciprocal tariffs", have reversed this outlook.

Main Messages:

1. Global trade will shrink in 2025.
   • Merchandise trade will contract by -0.2% (and -1.5% if more uncertainty spreads).
   • Services trade will grow more slowly.
2. North America will suffer the most.
   • Big drop in US and Canada trade and GDP.
   • They cause the biggest drag on world trade growth.
3. Asia and Europe stay positive but weaker.
   • Asia’s trade grows, but much slower.
   • Europe grows a little bit, not strong enough to save global trade.
4. Least-Developed Countries (LDCs) may benefit a little.
   • Some LDCs could sell more to the US as alternatives to China.
   • But they are still vulnerable if global uncertainty grows.
5. Global GDP will slow down.
   • From expected 2.8% growth to about 2.2% in 2025.
   • Trade and economic policies are now major risks for growth.
6. The Trump Tariffs are disruptive.
   • They don’t just hurt US-China trade.
   • They shake global supply chains, cause trade diversion, and hurt overall confidence.
   • Even services (like shipping, travel, IT) are impacted.

In Short:

The world economy in 2025 looks weaker than expected because of new US tariffs. Trade will shrink, growth will slow, and the risks of more disruption are high. Some poor countries might gain opportunities, but the overall environment is more uncertain and fragile.