Apr 21, 2025
Global trade is poised for a mild contraction in 2025, with the World Trade Organisation (WTO) forecasting a 0.2% decline in world merchandise trade volume. The WTO report highlights significant risks due to renewed tariff disputes and policy uncertainty, marking a notable downgrade from previous projections.
The report, informed by trade policies in effect as of April 14, underscores that North America will face the most significant impact, with exports expected to fall by 12.6% and imports by 9.6% in 2025. This regional downturn is projected to subtract 1.7 percentage points from global trade growth, pushing overall merchandise trade into negative territory.
WTO Director-General Ngozi Okonjo-Iweala expressed concerns over ongoing policy uncertainty and escalating tensions, particularly between the US and China. Despite a temporary de-escalation in tariff tensions, the WTO warned that a reactivation of such measures could lead to a more severe contraction in goods trade, potentially reaching -1.5%.
While the outlook for merchandise trade is bleak, commercial services trade is expected to grow by 4% in 2025, albeit one percentage point lower than previously anticipated. The WTO noted that weakened goods trade is likely to curb growth in transport, logistics, and travel-related sectors.
According to IndexBox data, Asia and Europe are forecast to see modest gains in both exports and imports next year, with Asia anticipated to grow by 1.6% and Europe by 1% in exports and 1.9% in imports. Conversely, the Middle East and other commodity-producing regions are expected to support global trade through stable energy exports.
Trade diversion caused by US-China tensions is likely to boost Chinese exports to regions outside North America by 4 to 9%, while US imports from China, particularly in textiles, apparel, and electronics, are expected to decline, creating opportunities for other suppliers, including least-developed countries (LDCs).
In 2024, services accounted for 26.4% of global trade, reaching a total of $8.69 trillion, up 9% year-on-year, driven by strong demand and increased digitalization. However, economic uncertainty and weakened goods trade are expected to reduce demand for transport and intermediate services in 2025.
Regional services growth in 2025 will be led by Europe (5%) and Asia (4.4%), while North America is expected to slow to 1.6%. The Middle East is forecast to grow by 1.7%, with further deceleration in 2026. The outlook is weakest for Africa and Latin America, both expected to record declines.
The WTO has called on its members to modernize trade rules and reinforce the multilateral trading system to better adapt to current global realities.
