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.

The introduction of new US reciprocal tariffs in 2025, often referred to as Trump tariffs, is reshaping global trade patterns, creating mixed impacts for Africa and Tanzania. According to the WTO Global Trade Outlook and Statistics 2025, Africa’s merchandise exports are expected to grow by +0.6% in 2025, slightly higher than previous forecasts, as US buyers seek new suppliers outside China. Least-developed countries, including Tanzania, are projected to benefit from this trade diversion, with export growth for LDCs rising to +4.8%. However, Africa’s services exports, which include key sectors like transport and tourism, are expected to contract by -1.6%, reversing earlier positive expectations. For Tanzania, opportunities lie in expanding agricultural, textile, and gold exports, but risks remain in its tourism and logistics sectors. Despite these challenges, Africa's overall GDP impact is minimal, with projected growth hovering around 0.0% change, reflecting resilience but also vulnerability to further global trade uncertainties.

Africa - Overall Trade Outlook 2025

• Africa’s Merchandise Exports (2025 forecast):
  • Growth: +0.6% (adjusted, after tariffs and uncertainty).
  • 2024 growth was +1.3%.
• Africa’s Merchandise Imports:
  • 2025 forecast: +6.5% growth.
  • Strong import recovery after a slow 2024 (+1.8%).
• Africa’s Services Exports:
  • 2025 baseline forecast was +1.8%.
  • Adjusted forecast: -1.6% decline (due to global uncertainty).
• Impact on Africa’s GDP:
  • 2025 GDP growth is forecast to slow by -0.04% to flat 0.0% growth​.
  • This indicates a mild but noticeable slowdown.

Tanzania Specific Points

• Tanzania is not individually highlighted among Africa's top 10 traders in the WTO report.
• However, based on the region-wide Africa performance and Tanzania's recent growth patterns:
  • Tanzania’s exports (goods and services) are likely to grow modestly, mainly due to opportunities in agriculture, gold, tourism, and digitally delivered services.
  • Risks:
    • Weaker demand from Europe and China.
    • Rising competition from other LDCs benefiting from US-China trade diversions​.

Key Opportunity for Tanzania:
New US demand for textiles, agricultural products, and electronics substitutes from African countries could support +4% to +5% export growth if leveraged well​.

Top 10 African Countries (Trade Outlook 2025)

Note: Rankings based on 2024 export size and WTO forecasts​​.

Quick Figure Highlights:

• Africa's contribution to world trade growth: Only +0.4 percentage points in 2025​.
• Africa’s share in digitally delivered services exports: 0.9% in 2024, slowly rising​.
• Overall world trade contraction: -0.2% (2025).

"Africa’s trade will show mixed results in 2025, with strong import growth but only modest export recovery. Tanzania could benefit from shifts in global trade, but services exports will remain vulnerable."

Impact of Trump Tariffs on Africa (Including Tanzania)

Impact on Tanzania Specifically

• Export Opportunities:
  • Tanzania could gain market access in the US for textiles, garments, agriculture as US buyers look for alternatives to Chinese goods​.
  • Strong sectors: gold exports, horticulture, and tourism recovery.
• Risks:
  • Services sector (tourism, logistics) could suffer because of lower global travel demand: services exports expected to fall -1.6% for Africa, including Tanzania​.
  • Logistics costs may increase (higher shipping costs), which could hurt exporters' competitiveness.
• GDP Impact:
  • Tanzania’s GDP growth impact is very minor (similar to Africa average at 0.0% to slight negative).
  • If global uncertainty spreads more, Tanzania's exports could slow more sharply in late 2025.

Short Conclusion:

"Trump tariffs could offer Tanzania a chance to expand goods exports, especially to the US, but services like tourism and shipping face a slowdown. Overall, Africa will see modest export gains but services sector pain."

Introduction

In 2025,U.S. President Donald Trump’s proposed tariff hikes—including a staggering increase from 34% to 145% on Chinese imports and a flat 10% tariff on key trade partners such as the European Union (18.5% of U.S. imports), Japan (4.5%), Vietnam (4.2%), and India (2.7%)—have reignited fears of a global trade war. These tariffs affect over 60% of U.S. imports, threatening to reduce global trade growth by up to 1.5 percentage points and wipe out US$300–500 billion in trade value in 2025.

While the intention is to protect American industries, the ripple effects are expected to disrupt global supply chains, increase inflation in the U.S., and reduce market access for exporters across developing countries. Africa, with average import tariffs around 8%, may experience a 1–2% decline in export revenue, particularly in agriculture and textiles. In East Africa, countries like Kenya, Ethiopia, and Tanzania, which rely on apparel and commodity exports, face uncertain prospects as U.S. demand contracts and global trade flows reorient. For Tanzania, while direct U.S. exposure is limited, the indirect effects—such as reduced demand for coffee, tobacco, and minerals—may lead to a 0.3–0.5% drop in GDP growth and 1–2% export revenue loss.

March 2025 Global Trade Update from UNCTAD, with analysis at the global, Africa-wide, East Africa, and Tanzania levels, including relevant figures.

🌍 Global

Trade Growth & Trends (2024–2025)

• Global trade reached US$33 trillion in 2024:
  • +3.7% growth overall.
  • +2% goods trade, +9% services trade.
  • Trade expanded by US$1.2 trillion: goods contributed US$500B, services US$700B.

Tariff Trends

• Agriculture: Highest average tariffs—~20% under MFN.
• Manufacturing: Moderate tariffs—~10% for 30% of trade; preferences apply to 70%.
• Raw materials: Over 80% duty-free; tariffs on the rest average 3.5%.

Key Issues

• Tariff escalation hinders value-added exports from developing countries.
• Tariff peaks (15%+) are common in sensitive sectors like agriculture and apparel.
• Protectionism and geoeconomic tensions are rising, especially between major economies (e.g., US-China).

🌍 Africa

Tariff Trends

• Africa imposes high tariffs: average ~8% on imports.
• African exports face lower tariffs in developed countries due to preferences.
• Intra-African trade benefits from 4.6% lower tariffs (regional integration).
• High tariffs remain in agriculture and manufacturing, especially on processed goods (e.g., food, apparel).

Trade Growth

• Africa’s intra-regional trade fell by 4% in Q4 2024, despite global growth.
• Africa’s export tariffs dropped slightly from 8.7% (2012) to 8.1% (2023), but still among the highest globally.

Challenges

• High tariffs and tariff escalation limit industrialization and competitiveness.
• Exports still centered around natural resources with low value addition.

🌍 East Africa

East Africa isn't isolated in most figures but falls under Africa or Rest of Asia depending on the context. However, based on patterns:

Trade Position

• East Africa faces:
  • High import tariffs (close to 8%),
  • Strong agriculture protection,
  • Less exposure to global manufacturing exports due to tariff escalation.
• Benefits from regional agreements (e.g., AfCFTA, EAC customs union).

Key Challenges

• Value addition in sectors like coffee, tea, textiles is limited due to high tariffs on processed goods.
• Still heavily reliant on exports of raw or semi-processed goods.

Tanzania-Specific Insights

Tanzania isn’t specifically mentioned in the report, but here are contextual implications:

Tariffs & Trade Policy

• Tanzania, as an EAC member, applies common external tariffs.
• Relies on tariffs for 10–30% of public revenue, similar to other developing countries.
• High tariffs on finished goods discourage local value addition.
• Opportunities lie in negotiating better access for processed exports (e.g., cotton textiles, coffee, cashew products).

Impacts

• Tariff escalation affects Tanzania’s ambition to industrialize.
• Agriculture and textiles—sectors where Tanzania has competitive potential—face tariff peaks in export markets.
• Preferential trade agreements (e.g., AGOA, EU GSP) offer limited but valuable export access.

Strategic Focus Areas

• Push for regional value chains (in agriculture, minerals).
• Improve trade facilitation and infrastructure to lower non-tariff barriers.
• Leverage AfCFTA to expand intra-African trade and reduce reliance on global markets with higher tariffs.

📊 Key Figures Table

United States' trade dynamics with other countries in the March 2025 UNCTAD Global Trade Update, including figures:

United States Trade Overview (2024–Q4 2024)

📦 Goods Trade

• Imports (Q4 2024): +6% annually, +1% quarterly
• Exports (Q4 2024): +2% annually, but -1% quarterly

📈 Services Trade

• Imports (Q4 2024): +8% annually, +4% quarterly
• Exports (Q4 2024): +8% annually, +1% quarterly

⚖️ Trade Balance (Goods)

• The U.S. continues to run the largest global trade deficit, reaching -US$355 billion with China alone in 2024.
• The deficit widened due to strong U.S. domestic demand and global supply chain sourcing.

🔁 Major U.S. Bilateral Trade Relationships (Goods, 2024)

These deficits reflect the U.S. importing more than exporting across these countries, especially in electronics, machinery, apparel, and consumer goods.

🔄 Trade Dependence Patterns (2024 Trends)

• U.S. dependence increased on:
  • Malaysia (+1.8%)
  • Viet Nam (+1.8%)
  • Taiwan Province of China (+1.5%)
• U.S. dependence decreased on:
  • China (–0.3%)
  • European Union (–0.2%)

👉 This shift reflects supply chain diversification (friendshoring/nearshoring), aiming to reduce reliance on China while increasing ties with ASEAN countries.

📉 Trade Risks for the U.S. (2025 Outlook)

• Rising geopolitical tensions and tariff increases, especially toward China.
• Trade policy shifts may cause:
  • Frontloading of shipments (before new tariffs).
  • Retaliatory tariffs by partners.
  • Disruptions in value chains for electronics, metals, and autos.

📊 Sector-Specific Trade Involvement

U.S. trade deficits are high in:

• Electronics & machinery
• Textiles & apparel
• Motor vehicles

Exports are strong in:

• Agricultural goods
• Aerospace
• Services (finance, ICT, intellectual property)

The proposed tariff hikes by Donald Trump—especially the massive increase on Chinese imports and widespread 10% blanket tariffs—would have major global economic consequences. What these tariffs mean, and how they could impact the global economy, trade flows, and developing countries:

📊 Tariff Hike Summary (as proposed)

Global Economic Effects of These Tariff Changes

1. 🧨 China: Shockwaves from 145% Tariff

• A tariff jump from 34% to 145% is trade war escalation.
• China’s export-heavy economy would face a massive revenue hit, especially in electronics, machinery, and consumer goods.
• Could trigger retaliatory tariffs from China, disrupting U.S. firms reliant on Chinese inputs.
• Major global value chains (e.g. Apple, auto, semiconductors) would be destabilized.
• Result: Global manufacturing slowdown, inflationary pressures in the U.S., and disruptions across Asia.

2. 🔄 Redirection of Trade (Global Supply Chains)

• With China hit hard, Southeast Asia (Vietnam, Malaysia, Thailand) may benefit as alternative suppliers—but:
  • They too face 10% tariffs, reducing their price advantage.
  • Smaller economies may struggle to scale fast enough, leading to supply bottlenecks.
• U.S. companies might reshore (bring back manufacturing), but this raises production costs.

3. 💰 Consumer Inflation in the U.S.

• Higher tariffs = higher import prices.
• U.S. businesses and consumers may face higher costs, especially in:
  • Electronics
  • Household goods
  • Clothing
• May reverse disinflation trends seen in 2024–Q1 2025.

4. 📉 Global Trade Contraction

• Based on 2024 trade data, global trade growth was already decelerating in Q4.
• New tariffs could cut global trade growth by up to 1–1.5 percentage points in 2025.
• UNCTAD warned about geoeconomic fragmentation—this could worsen it sharply.

5. 🌍 Developing Countries at Risk

• Countries like Vietnam, India, Malaysia, and Thailand depend on exports to the U.S.
• Even though tariffs are lower than for China, they still lose competitiveness.
• Africa and Latin America may not benefit much due to:
  • Low integration in electronics/GVCs
  • High internal trade barriers

6. 💼 Business Uncertainty & Investment Drops

• Firms facing sudden 10–100%+ tariff increases may delay:
  • Expansion
  • Investment in new plants/supply chains
• This slows global FDI flows, especially in emerging markets.

Estimated Sectoral Impacts

Conclusion: Likely Global Effects

Likely effects of Trump’s proposed tariff increases—particularly the massive 145% on China and 10% flat tariffs on key U.S. trade partners—broken down by:

🌍 GLOBAL LEVEL IMPACT

🔺 Key Figures

• Global trade value (2024): US$33 trillion
• Share of U.S. in global imports: ~13%
• Tariffs imposed on China: Raised from 34% to 145%
• New 10% blanket tariffs on 11 more countries covering ~45% of U.S. imports

🔁 Trade Impact

• Could reduce global trade growth by 1–1.5 percentage points.
• May result in US$300–500 billion in global trade losses by 2025.
• Consumer prices in the U.S. likely to rise (inflation rebound).
• Global supply chains will be reconfigured, disrupting:
  • Electronics
  • Apparel
  • Auto & machinery
• Services trade may stay resilient but also faces uncertainty due to retaliation risks.

🌍 AFRICA LEVEL IMPACT

📦 Africa–U.S. Trade Context

• Africa’s total trade with U.S. is relatively small (~2% of U.S. imports).
• Focused on raw materials (oil, metals), textiles, and agricultural exports.
• Top exporters: Nigeria, South Africa, Kenya, Ethiopia, Egypt.

🔺 Effects on Africa

🧾 Estimated Figures

• Africa’s trade may contract 1–2% due to ripple effects.
• African textile exports may benefit if AGOA preferences remain.
• South Africa could lose market share in metals and autos if retaliatory tariffs apply.

🌍 EAST AFRICA LEVEL IMPACT

📦 East Africa–U.S. Trade Context

• Key exporters: Kenya, Ethiopia, Uganda, Tanzania.
• Focus: coffee, tea, horticulture, garments (especially from Ethiopia and Kenya).

🔺 Effects on East Africa

🧾 Estimated Figures

• Kenya and Ethiopia could gain short-term apparel market share.
• But if U.S. demand weakens, export earnings may still fall 2–3%.
• Overall regional growth could be hit by 0.5–1% GDP decline due to lower trade income.

TANZANIA LEVEL IMPACT

📦 Tanzania–U.S. Trade Snapshot

• U.S. is not among top 5 trade partners.
• Key exports: coffee, tobacco, spices, textiles, minerals.
• Imports from U.S.: machinery, medical equipment, vehicles.

🔺 Effects on Tanzania

🧾 Estimated Figures

• Tanzania’s exports to U.S.: Likely unaffected directly (small share)
• But global slowdown could reduce export revenues by 1–2% (coffee, minerals)
• Capital goods (e.g., machines) could become 10–15% more expensive due to higher U.S. prices
• GDP growth may slow by 0.3–0.5 percentage points if global demand weakens

SUMMARY TABLE