WTO Raises 2025 Trade Growth Forecast on U.S. Import Surge, Warns of 2026 Slowdown

Global merchandise trade is now projected to expand by 0.9% in 2025, according to a World Trade Organization update, reversing the 0.2% contraction forecast in April but remaining well below the 2.7% pre-tariff estimate.

The revision reflects a sharp frontloading of U.S. imports ahead of tariff hikes, which offset some negative effects from recent trade measures.

The WTO warned the improvement is temporary. Higher duties, including U.S. “reciprocal” tariffs imposed on 7 August, are expected to slow trade growth to 1.8% in 2026, down from the 2.5% forecast earlier this year.

Director-General Ngozi Okonjo-Iweala said global trade had “shown resilience in the face of persistent shocks” but stressed that tariff uncertainty “continues to weigh heavily on business confidence, investment and supply chains.” She noted the absence of widespread retaliation but cautioned that such a cycle “could be very damaging to global trade.”

Regional Outlook

• Asia will remain the largest positive driver in 2025, with exports up 4.9% versus 1.6% previously forecast.

• North America’s imports are now expected to fall 8.3%—less than April’s 9.6% projection—thanks to stronger first-quarter frontloading. Exports will decline 4.2%, a smaller drop than previously estimated.

• Europe’s export and import growth will be slightly weaker than April’s forecast, at -0.9% and 0.4%respectively.

• Energy-exporting regions will see shrinking contributions to global growth as lower oil prices reduce revenues and imports.

Forecast Drivers

1. Frontloading: U.S. import volumes rose 11% year-on-year in the first half of 2025, with a record 14% quarter-on-quarter jump in Q1, followed by a 16% drop in Q2. Similar, if smaller, patterns appeared elsewhere.

2. Macroeconomic conditions: A weaker U.S. dollar and lower oil prices are supporting manufacturing economies, though the latter dampens demand in oil-producing countries.

3. Tariffs: While exemptions and U.S. truces with China and the UK provided limited relief, higher August tariffs will increasingly suppress trade into 2026.

WTO News Release [link]