WTO Raises Global Trade Outlook for 2025, Warns of Sharp Slowdown Ahead

The World Trade Organization (WTO) has revised its global trade forecast upward for 2025, citing resilient demand and rapid growth in artificial intelligence-related sectors. However, it cautioned that momentum could fade sharply in 2026 as global economic conditions weaken and the effects of new tariffs take hold.

According to the WTO’s Global Trade Outlook and Statistics report released Tuesday, global merchandise trade volume is now expected to grow by 2.4% in 2025, significantly higher than the 0.9% projection made in August. But the optimism stops there, the organization cut its 2026 forecast from 1.8% to just 0.5%, signaling a tougher year ahead.

“Trade growth is expected to slow in 2026 as the global economy cools and as the full impact of higher tariffs is finally felt for a full year,” the report stated.

The current wave of trade restrictions, many introduced under U.S. President Donald Trump’s expanded tariff regime, has reshaped global commerce. Even traditional allies such as the United Kingdom have faced baseline tariffs of around 10% on exports to the United States, while other nations scrambled to negotiate temporary relief deals.

Despite these headwinds, global trade volumes rose 4.9% year-on-year in the first half of 2025. The WTO attributed this surge to a mix of front-loaded U.S. imports ahead of tariff deadlines, favorable macroeconomic conditions, and strong performance in emerging markets.

A key driver behind the rebound has been the artificial intelligence (AI) boom, which now represents nearly half of total trade expansion. Demand for semiconductors, servers, and cloud computing equipment has soared, rising 20% year-on-year in value terms. Asia accounted for nearly two-thirds of global AI-related trade growth, led by strong export activity in economies like China, South Korea, and Taiwan.

“Trade growth spanned the digital value chain, from raw silicon to cloud infrastructure,” the WTO report noted. The United States contributed roughly one-fifth of AI-related trade growth during the same period.

Still, the organization warned that trade-restrictive measures, rising geopolitical tensions, and weakening business confidence in advanced economies could pose major risks heading into 2026.

Service exports are also expected to lose momentum, slowing from 6.8% in 2024 to 4.6% in 2025 and 4.4% in 2026, as global output and consumer demand ease.

WTO Director-General Ngozi Okonjo-Iweala said the modest resilience in 2025 reflects “measured responses to tariff changes” and “the stabilizing role of the rules-based multilateral system.” However, she urged nations to avoid complacency.

“Today’s disruptions are a call to action,” she said. “Countries must reimagine trade cooperation and strengthen the global trading framework to ensure prosperity is shared widely.”

While the short-term forecast suggests a rebound in 2025, the WTO’s warning underscores a sobering reality, the golden age of unrestrained global trade may be giving way to a more fragmented and cautious era.