The World Trade Organization (WTO) released its Global Trade Outlook and Statistics 2025, projecting a marginal decline in global merchandise trade amid persistent tariff tensions, especially between the United States and China. The report highlights broader trade policy uncertainties and the risk of global economic fragmentation. While merchandise trade is expected to contract, services trade may still grow modestly. The outlook warns of recessionary pressures, especially for developing and least-developed countries (LDCs), and urges greater global policy coordination to counter rising economic vulnerabilities.
Key Points Of WTO Global Trade Outlook 2025
Projected Global Trade Trends
- Global merchandise trade is projected to decline by 0.2% in 2025.
- In case of further escalation in trade tensions, the decline could deepen to 1.5%.
- This is a stark contrast from 2.9% growth in 2024.
Impact of Tariffs
- US reciprocal tariffs may cut global trade growth by 0.6 percentage points.
- Ongoing US-China tariff escalations in 2025 could reduce trade by another 0.8 percentage points.
Services Trade Outlook
- Global services trade is expected to grow by 4.0% in 2025.
- However, growth remains slower than projected, due to spillover effects from goods trade tensions.
- Sectors like transport and travel services are particularly affected.
Regional Impact
- North America is expected to see a sharp 12.6% decline in exports.
- Asia is projected to grow its exports by 1.6%.
- Europe’s export growth is estimated at 1.0%.
Impact on Least-Developed Countries (LDCs)
- LDCs, due to limited export diversification, are highly vulnerable to global trade declines.
- Trade disruptions can significantly impact their economic stability.
Trade Diversions from US-China Tensions
- Chinese exports to regions outside North America may grow by 4% to 9%.
- US imports from China are expected to decline, creating potential opportunities for other supplier nations, including LDCs.
Economic Risks and UNCTAD’s Warning
- UNCTAD forecasts global GDP growth at 2.3% in 2025, suggesting a rising risk of recession.
- Developing economies are more vulnerable to shocks from trade fragmentation and geopolitical conflicts.
- UNCTAD urges enhanced regional and global policy coordination to build economic resilience.
India’s Position in Global Trade (Excluding Intra-EU Trade)
- Merchandise Exports: Rank dropped to 14th; share steady at 2.2%.
- Merchandise Imports: Rank dropped to 7th; share remains 3.4%.
- Commercial Services Exports: Rank declined to 6th; share fell slightly from 5.4% to 5.3%.
- Commercial Services Imports: Rank unchanged at 6th; share fell from 4.2% to 4.1%.
| Summary/Static | Details |
| Why in the news? | A Report Of Global Trade Outlook and Statistics 2025 |
| Projected Global Merchandise Trade | Decline of 0.2% in 2025; could reach 1.5% with escalating tariffs |
| Impact of Tariffs | US reciprocal tariffs (-0.6 ppt), US-China tensions (-0.8 ppt) |
| Services Trade Growth | Projected at 4.0%; slowed by trade-linked disruptions |
| North America Exports | Expected to decline by 12.6% |
| Asia’s Export Growth | Projected at 1.6% |
| Europe’s Export Growth | Estimated at 1.0% |
| LDC Vulnerability | High, due to narrow export base and global trade slowdown |
| Chinese Export Diversion | Expected increase by 4%–9% outside North America |
| UNCTAD Economic Forecast | Global growth to slow to 2.3%; recession risks increasing |
| India’s Merchandise Export Rank | Dropped to 14th; share stable at 2.2% |
| India’s Merchandise Import Rank | Dropped to 7th; share stable at 3.4% |
| India’s Services Export Rank | Dropped to 6th; share fell to 5.3% |
| India’s Services Import Rank | Unchanged at 6th; share dropped to 4.1% |
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