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| Donald Trump's tariffs will make global trade shrink, says WTO | Donald Trump's tariffs will make global trade shrink, says WTO |
| (33 minutes later) | |
| WTO chief Ngozi Okonjo-Iweala called US-China relations "really worrying" at a press conference in Geneva on Wednesday | |
| The World Trade Organization (WTO) has forecast that global trade will fall this year because of US President Donald Trump's tariffs. | The World Trade Organization (WTO) has forecast that global trade will fall this year because of US President Donald Trump's tariffs. |
| It added "severe downside risks", including reciprocal tariffs and political uncertainty, could lead to an even sharper decline in global goods trade. | It added "severe downside risks", including reciprocal tariffs and political uncertainty, could lead to an even sharper decline in global goods trade. |
| "The decline is expected to be particularly steep in North America," the WTO said, forecasting trade to drop by more than a tenth in that region. | "The decline is expected to be particularly steep in North America," the WTO said, forecasting trade to drop by more than a tenth in that region. |
| Ngozi Okonjo-Iweala, the WTO director general, called the "decoupling" of the US and China "a phenomenon that is really worrying to me". | Ngozi Okonjo-Iweala, the WTO director general, called the "decoupling" of the US and China "a phenomenon that is really worrying to me". |
| The WTO previously expected global goods trade to expand by 2.7% in 2025 but it now forecasts it will fall by 0.2%. | The WTO previously expected global goods trade to expand by 2.7% in 2025 but it now forecasts it will fall by 0.2%. |
| Chief economist Ralph Ossa said: "Tariffs are a policy lever with wide-ranging, and often unintended consequences. | Chief economist Ralph Ossa said: "Tariffs are a policy lever with wide-ranging, and often unintended consequences. |
| "Our simulations show that trade policy uncertainty has a significant dampening effect on trade flows, reducing exports and weakening economic activity," he added. | "Our simulations show that trade policy uncertainty has a significant dampening effect on trade flows, reducing exports and weakening economic activity," he added. |
| Also on Wednesday, the UN trade and development body, UNCTAD, released its own report which forecasts global growth to slow to 2.3% in 2025 due to escalating trade tensions and uncertainty. | Also on Wednesday, the UN trade and development body, UNCTAD, released its own report which forecasts global growth to slow to 2.3% in 2025 due to escalating trade tensions and uncertainty. |
| It said the projection was below "the 2.5% threshold widely viewed as signalling a global recession". | It said the projection was below "the 2.5% threshold widely viewed as signalling a global recession". |
| Some regions could still see trade growth | Some regions could still see trade growth |
| A baseline tariff of 10% on almost all foreign imports to the US kicked in on 5 April, although some countries and goods are exempt. | A baseline tariff of 10% on almost all foreign imports to the US kicked in on 5 April, although some countries and goods are exempt. |
| China has a much higher tariff, which now totals 145% on most goods. | China has a much higher tariff, which now totals 145% on most goods. |
| The US stock market slid on opening on Wednesday with the big indexes falling amid the ongoing uncertainty. | The US stock market slid on opening on Wednesday with the big indexes falling amid the ongoing uncertainty. |
| Despite the prediction of plunging trade with the US, the WTO expects some regions will still see trade growth. | Despite the prediction of plunging trade with the US, the WTO expects some regions will still see trade growth. |
| It said Asia and Europe were still projected to post modest growth in both exports and imports this year. | It said Asia and Europe were still projected to post modest growth in both exports and imports this year. |
| "The collective contribution to world trade growth of other regions would also remain positive," the WTO report said. | "The collective contribution to world trade growth of other regions would also remain positive," the WTO report said. |
| For the first time, the report contains a forecast for services trade - which is when countries buy and sell services to each other instead of goods. | For the first time, the report contains a forecast for services trade - which is when countries buy and sell services to each other instead of goods. |
| This is common in industries such as tourism or finance where nothing physical is shipped but a service is provided. | This is common in industries such as tourism or finance where nothing physical is shipped but a service is provided. |
| The WTO forecasts services trade to grow by 4% in 2025, which is around one percentage point less than expected. | The WTO forecasts services trade to grow by 4% in 2025, which is around one percentage point less than expected. |
| Trump's tariff announcements and climbdowns | Trump's tariff announcements and climbdowns |
| Since Trump's inauguration in January there has been a flurry of announcements on tariffs. | Since Trump's inauguration in January there has been a flurry of announcements on tariffs. |
| The US president says the import taxes will encourage US consumers to buy more American-made goods, increase the amount of tax raised, and lead to huge levels of investment in the country. | The US president says the import taxes will encourage US consumers to buy more American-made goods, increase the amount of tax raised, and lead to huge levels of investment in the country. |
| However, critics say bringing manufacturing back to the US is complicated and could take decades and that the economy will struggle in the meantime. | However, critics say bringing manufacturing back to the US is complicated and could take decades and that the economy will struggle in the meantime. |
| Trump has also backtracked on many of his announcements. | Trump has also backtracked on many of his announcements. |
| Just hours after steep levies against roughly 60 of America's trading partners kicked in earlier this month, Trump announced a 90-day pause on those tariffs to all countries bar China, in the face of mounting opposition from politicians and the markets. | Just hours after steep levies against roughly 60 of America's trading partners kicked in earlier this month, Trump announced a 90-day pause on those tariffs to all countries bar China, in the face of mounting opposition from politicians and the markets. |
| In March, the governor of the Bank of England has warned that Trump's tariffs could mean less money in UK consumers' pockets. | In March, the governor of the Bank of England has warned that Trump's tariffs could mean less money in UK consumers' pockets. |