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WTO Warns of Up to 1.5% Global Trade Contraction in 2025 Due to U.S. Tariffs

President Trump’s aggressive tariff strategy triggers economic uncertainty, with high duties on China and paused negotiations with the EU fueling market volatility.

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Overview

  • The WTO projects global merchandise trade could shrink by up to 1.5% in 2025, citing significant risks from U.S. tariff policies.
  • U.S. tariffs on Chinese imports have reached 145%, with China retaliating at 125%, while duties on other nations are temporarily paused for negotiations.
  • North American exports are forecast to decline by 12.6%, with GDP growth in the region slowing to just 0.4% this year.
  • Federal Reserve Chair Jerome Powell and IMF Managing Director Kristalina Georgieva warn of heightened inflation, slowed growth, and shaken investor confidence due to trade uncertainties.
  • Financial markets remain volatile as U.S. Treasury sell-offs increase, the dollar weakens, and fears of broader economic instability grow.