Trade Resilient in 2025 but Set to Slow in 2026
The World Trade Organization (WTO) has warned that global trade growth will slow sharply in 2026 as new tariffs and rising policy uncertainty take effect. Despite stronger-than-expected performance this year, the organization cautioned that escalating protectionist measures — especially from the United States — could strain global supply chains and dampen recovery efforts.
In its latest report released from Geneva on Tuesday, the WTO said it expects goods trade to grow by 2.4% in 2025, up from its earlier forecast of 0.9% in August. However, the organization sharply reduced its 2026 projection to just 0.5%, compared to a previous estimate of 1.8%.
The WTO also predicted slower expansion in the trade of services, explaining that services often depend on the flow of physical goods across borders.
Trump’s Tariffs Raise Global Concerns
The WTO identified President Donald Trump’s renewed tariff policies as a central cause of the slowdown. The administration recently imposed double-digit import taxes on nearly all U.S. trading partners, alongside steep levies on steel, aluminum, and cars — pushing average tariff levels in the United States to highs not seen in more than a century.
Ngozi Okonjo-Iweala, the WTO’s Director-General, expressed concern over the “unprecedented uncertainty” created by these trade policies. She warned that volatile measures undermine business confidence and disrupt investment decisions worldwide.
“The uncertainty over global trade rules and rising protectionism are dampening economic growth,” she said.
“Still, we have seen that trade among developing nations remains relatively strong — the rest of the world is, in a sense, trading with itself.”
Developing Nations and AI Demand Help Offset Decline
Despite these challenges, the WTO noted that global trade has been more resilient than expected in 2025. Many countries have avoided full retaliation against U.S. tariffs, helping prevent a major trade war. Increased trade among developing economies and rising demand for AI-related products and technology components have also helped support growth.
Moreover, many companies stockpiled goods ahead of new tariffs earlier this year, temporarily boosting import and export numbers. The organization added that the strong performance of sectors tied to artificial intelligence hardware and semiconductor manufacturing played a significant role in stabilizing global trade volumes.
U.S. Trade Data Delays and Global Implications
The U.S. government was due to release trade data for August, but ongoing government shutdowns have delayed key reports. Economists expect that when the figures are eventually published, they may show a notable decline in imports, reflecting the impact of the August 7 tariff hikes.
Earlier data from July showed a short-lived rebound in imports as firms rushed to bring goods into the country before tariffs took effect. However, experts believe this surge masked deeper weaknesses in global demand.
WTO Calls for Policy Stability
The WTO emphasized that maintaining predictable trade policies is essential for long-term economic recovery. It urged member states to avoid unilateral measures and strengthen cooperation to restore confidence in the global trading system.
“Trade remains the engine of global growth,” Okonjo-Iweala said.
“To keep it running, the world must avoid fragmentation and build fairer, more stable trade rules.”
As the world’s economies brace for slower trade momentum in 2026, analysts warn that persistent tariff battles and geopolitical tensions could continue to challenge global supply chains and hinder investment flows.
In other news also read about World Bank Warns Africa to Create Jobs as Gen Z Frustration Grows
