It had projected 2.7% growth earlier. Trade is forecast to rebound by 2.5% in 2026, WTO said in its Global Trade Outlook and Statistics Update. The decline is expected to be particularly steep in North America, where exports are expected to drop by 12.6%.
“However, severe downside risks exist, including the application of “reciprocal” tariffs and broader spillover of policy uncertainty, which could lead to an even sharper decline of 1.5% in global goods trade and hurt export-oriented least-developed countries,” WTO said.
The US has suspended reciprocal tariffs for 90 days till July 9, for more than 70 countries.
As per the report, the impact of recent trade policy changes varies sharply across regions. In the adjusted forecast, North America now subtracts 1.7 points from global merchandise trade growth in 2025, turning the overall figure negative. Asia and Europe continue to contribute positively with Asia’s contribution halved to 0.6 points. The combined contribution of other regions — Africa, the Commonwealth of Independent States, including certain associate and former member states, West Asia, and South and Central America and the Caribbean — also declines but remains positive.
As per the report, India’s share in global merchandise exports was 1.8% in 2024 and 2.8% in global imports.“The disruption in US–China trade is expected to trigger significant trade diversion, raising concerns among third markets about increased competition from China. Chinese merchandise exports are projected to rise by 4-9 % across all regions outside North America as trade is redirected,” WTO said.It noted that at the same time, US imports from China are expected to fall sharply in sectors such as textiles, apparel and electrical equipment, creating new export opportunities for other suppliers able to fill the gap. This could open the doors for some least-developed countries to increase their exports to the US market.
India’s rank among leading merchandise exporters (excluding intra-EU trade) dropped a rank to 14 in 2024 from 2023 though its share remained unchanged at 2.2%. Its rank dropped a notch to seven among major merchandise importers (excluding intra-EU trade) with unchanged share at 3.4%.
In leading exporters of commercial services (excluding intra-EU trade), India’s share fell to 5.3% in 2024 from 5.4% a year earlier and among major importers, its share declined to 4.1% from 4.2%.
Services trade, GDP
Services trade, though not directly subject to tariffs, is also expected to be adversely affected. The WTO said that tariff-induced declines in goods trade weaken demand for related services such as transport and logistics, while broader uncertainty dampens discretionary spending on travel and slows investment-related services.
“As a result, the global volume of commercial services trade is now forecast to grow by 4% in 2025 and 4.1% in 2026-well below baseline projections of 5.1% and 4.8%,” it added.
WTO economists now expect world gross domestic product (GDP) at market exchange rates to grow 2.2% in 2025, 0.6 percentage points below the no-tariff-change baseline, before slightly recovering to 2.4% in 2026. Tariff changes are forecast to have the largest impact on North America (–1.6 percentage points), followed by Asia (–0.4 points).
