According to the forecast of the World Trade Organization (WTO), the current customs dispute will lead to less trade globally and slow down economic growth. The USA, but also Canada, are particularly affected.
In view of the customs spiral triggered by the USA, world trade could decrease this year. This forecast makes the World Trade Organization (WTO) in its outlook presented on Wednesday.
The WTO experts assume that the volume of world trade in 2025 will decrease by at least 0.2 percent – in the worst case by 1.5 percent. Without the latest developments in the customs dispute, around three percentage points would have been more and thus growth. According to the experts, a moderate recreation is only to be expected for 2026: then an increase of 2.5 percent.
Strong episodes for North America
According to WTO, the tariffs have the biggest effects on the USA itself – and on Canada. Apart from the trading volume, economic output will also suffer: This year, the WTO only expects 0.4 instead of two percent growth in gross domestic product (GDP) in North America. She only provides your data together for the USA and Canada.
In North America, exports are likely to decrease by 12.6 percent this year, imports by 9.6 percent, according to WTO analysis. Before the customs announcements, she expected 2.2 percent of exports and plus 2.8 percent in imports.
Europe less affected
According to WTO forecasts, the Chinese exports to the USA decrease by 77 percent in the current scenario. The consequences for Europe are less drastic: Here, the WTO expects an export plus of one percent (instead of previously expected 1.4 percent) and plus 1.9 percent imports instead of 2.1 percent. Overall, WTO Europe forecast economic growth of 1.2 instead of 1.4 percent for the current year.
In global GDP, the WTO 2025 still expects 2.2 percent growth, reduced by 2.8 percent that it had expected before the US customs duties. The analysis of the WTO is a snapshot with the valid customs rules on April 14th.
US President Donald Trump had declared April 2 to the “Day of Liberation” and imposed flat-rate tariffs of 20 percent against trading partner. These were put on ice for 90 days shortly afterwards. The exception is China: The import tariffs on goods from the People’s Republic were even screwed up to 145 percent, whereupon China countered with counter-tariffs of 125 percent on US goods.
China is likely to export more to other countries
The customs dispute between China and the USA alone should have an impact on other countries, the WTO says. Because of the high trading hurdles in the United States, this could lead to a redirection of trade flows from the People’s Republic into other regions of the world. China’s exports in regions outside of North America are likely to grow by four to nine percent.
At the same time, the imports of the United States from China are expected to decrease significantly in some areas – such as textiles and electrical equipment. This in turn opens up opportunities for developing countries to increase their exports to the United States.
In its forecast, the WTO pointed out that when evaluating the effects of the customs conflict, one predicted on largely unknown territory. “The unprecedented character of the latest changes in trade policy is a challenge for economic prognostics, since there was no directly comparable event in recent history.”
