Trump's tariffs plunge global trade forecast

WTO and UNCTAD warn global trade and growth could decline in 2025 as trump's escalating tariffs hit them.

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Leading shipping industry organizations that forecast global trade are slashing their economic forecasts for next year in the wake of President Donald Trump's tariff war.

In a deeply concerning development, the World Trade Organization (WTO) has warned that global merchandise trade could fall by as much as -1.5% in 2025, potentially marking the sixth time in 60 years that world merchandise trade has seen a decline — joining major economic shocks like the Covid-19 pandemic and the global financial crisis.

WTO

According to the WTO Secretariat’s latest “Global Trade Outlook and Statistics” report released yesterday, global merchandise trade volumes are expected to fall by 0.2% in 2025 under current conditions — nearly 3 percentage points lower than in a low-tariff baseline. This is based on the tariff policy landscape as of April 14. If the situation worsens on July 9, when Trump is expected to impose new tariffs globally, trade could fall further, to -1.5%.

“I am deeply concerned by the uncertainty surrounding trade policy, including the US-China stand-off,” said WTO Director-General Ngozi Okonjo-Iweala.

She said that the prolonged uncertainty is becoming a “brake” for global growth.

On the same day, the United Nations Conference on Trade and Development (UNCTAD) also warned that the global economy is on the verge of a recession.

According to a new UNCTAD report, global growth is expected to slow to 2.3% in 2025, due to the impact of trade policy shocks, financial volatility and increased uncertainty.

“Trade policy uncertainty is at a historical high,” the report stated, “and this is already translating into delayed investment decisions and reduced hiring.”

For tanker owners, the International Energy Agency (IEA) has revised down its forecast for global oil demand growth for 2025 and 2026, citing barriers from trade tensions, especially protectionist measures introduced by Mr. Trump. The IEA has lowered its forecast for global oil demand growth to 730,000 barrels per day in 2025 and 690,000 barrels per day in 2026. The US Energy Information Administration (EIA) has also recently cut its forecast for oil demand growth in 2025 by 30%, to 900,000 barrels per day. Meanwhile, Goldman Sachs has an even more conservative forecast, with an increase of just 300,000 barrels per day from late 2024 to late 2025.

For the container shipping market, a recent report from Linerlytica said: “The The US-China standoff continues to keep container market sentiment poor with US tariff concessions far from sufficient to restore Transpacific volumes with cargo bookings in the next 3 weeks reported to be down by 30-60% in China and by 10-20% in the rest of Asia.”

Related to this development, the state of California on Wednesday filed a lawsuit to block the massive tariffs that Trump is imposing on foreign trading partners, accusing him of abusing his power and causing serious financial harm to the state and the entire US.

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