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Amid the “trade war”, the volume of world merchandise trade is projected to shrink by 0.2% this year relative to 2024, according to an updated forecast released by the World Trade Organisation (WTO). This scenario will materialise if the U.S. do not reinstate the tariffs paused for 90 days. However, further tightening of import rules could lead to a more pronounced decline in trade volumes of up to 1.5%. The previous WTO outlook, released in October, expected trade to grow by 3% in 2025.
WTO analysts believe that redirection of trade flows would affect most regions. For China in particular, with exports to the U.S. expected to decline by 77%, redirecting shipments quickly is a top priority to ensure stable economic growth. Experts predict that China’s shipments to Africa will grow by 5%, to Europe and Asia by 6%, and to South America by 9%. The potential expansion of China’s presence in the local market is a source of concern for local producers – especially EU countries, which are looking to protect themselves from the influx of Chinese goods.
The updated outlook released by the United Nations Conference on Trade and Development (UNCTAD) suggests that China’s economy is expected to grow by only 4.4% in 2025 (4.7% was expected in October), down from 5% in 2024. The UNCTAD report also includes projections for U.S. GDP growth, which has been revised down to 1% (1.8%) from 2.8% last year.
Overall, the global economy is expected to grow by 2.3% in 2025 (2.8% in 2024) due to the global trade war, UNCTAD says, noting that this outlook is subject to numerous revisions.