Onome Amuge
Ngozi Okonjo-Iweala, director general, WTO
Global goods trade may be facing renewed headwinds, as the World Trade Organization (WTO) issued a warning that trade barriers and tariffs continue to weigh down on the growth trajectory witnessed in 2024.
Merchandise trade had rebounded in the first three quarters of 2024, posting growth after experiencing a year-long slump, but lingering uncertainties over trade restrictions and tariffs threaten to disrupt this upward trend and further complicate the global trade landscape.
While the WTO’s latest trade barometer suggests that global merchandise trade continued its upward trajectory in the last quarter of 2024 and the beginning of 2025, it cautioned against over-optimism due to escalating trade policy uncertainty.
Referencing the ongoing trade tensions, particularly between the US and other major economies that have resulted in reciprocal tariff increases since President Donald Trump’s election, the WTO warned that this uncertainty has the potential to disrupt the positive trend observed in the short-term forecast, stressing that the index’s predictions should be interpreted with caution.
The Trump administration’s aggressive use of tariffs as a trade tool since his inauguration has profoundly reshaped the global trade landscape, imposing sweeping tariffs on key trading partners like China, Canada, and Mexico, and targeting US imports of steel and aluminum from across the world.
Many affected countries have retaliated by implementing countermeasures that increased the cost of US exports.
Despite the WTO’s Trade Barometer suggesting positive growth in merchandise trade, the organisation acknowledged that this could be short-lived.
Typically, a positive reading from the barometer indicates that trade is above trend and accelerating. However, the organisation pointed out that the continued uncertainty over tariffs and trade restrictions might lead to temporary trade boosts as businesses and consumers rush to stock up on imports before potential new measures take effect, which could ultimately dampen demand later in the year.
The volatile trade environment caused by President Trump’s unpredictable tariff policy and frequent about-faces on trade deals has made it increasingly challenging for businesses and governments to accurately anticipate and mitigate the impact of tariffs.
This has been particularly evident in the European export market, where data seems to indicate that European exports and imports have underperformed expectations. On the contrary, Asian exports to North America have outperformed projections.
The WTO’s Trade Barometer provides a mixed outlook for global merchandise trade, indicating a potential for higher growth in some sectors, while also signaling softer growth in others.
According to the barometer, inputs for automative products, container shipping, and air freight are all above trend, suggesting potential growth acceleration in these sectors. However, the export orders and trade in electronic components are on trend, indicating a slower pace of growth in these areas.
