(Ecofin Agency) - • WTO now expects global goods trade to shrink by 0.2% in 2025, reversing its earlier forecast of 2.7% growth.
• Tariff tensions, especially between the United States and China, are weighing heavily on trade outlook.
• Africa could see a slight boost in exports due to trade shifts but remains vulnerable to global shocks.

The World Trade Organization warned that trade flows could shrink by 0.2% in 2025 _ a sharp reversal from the 2.7% growth predicted earlier, based on the assumption of low tariff policies.

The updated outlook, released yesterday in the WTO’s latest Global Trade Outlook and Statistics report, reflects rising global tensions and a growing number of new tariffs. One of the key drivers of the downgrade is the ongoing trade dispute between the United States and China.

WTO economists warn that if trade tensions worsen, the decline in global trade could deepen to -1.5%. The organization points to the risk of the United States reinstating reciprocal tariffs that are currently paused for 90 days, except those still applied to China. If those tariffs go back into effect, they could cut global trade growth by 0.6 percentage points on their own.

“Our simulations show that trade policy uncertainty has a significant dampening effect on trade flows, reducing exports and weakening economic activity,” said Ralph Ossa, the WTO’s Chief Economist.

The impact of this trend will not be felt evenly across regions. North America is expected to take the hardest hit, with exports dropping by 12.6% and imports by 9.6% in 2025. Asia and Europe, meanwhile, could still manage to see slight gains in trade despite the broader slowdown.

Interestingly, some African countries might benefit from the current turmoil. Because they export many of the same goods as China—such as textiles and electronics—they could pick up part of the demand redirected by new U.S. tariffs on Chinese products. As a result, the WTO now expects Africa’s exports to grow by 0.6% this year, slightly higher than the earlier forecast of 0.5%. Imports could rise by 6.5%, up from 6.2%.

Still, the report highlights the fragile nature of this momentum. Africa’s exports remain concentrated in a small range of goods, and the region has limited flexibility to deal with global shocks. This makes any gains from current trade shifts both modest and uncertain.

Trade in services, while not directly affected by tariffs, is also expected to slow down. The WTO forecasts global services trade to grow by 4% in 2025, down from previous years. Weaker trade in goods is already spilling over into services like transport, tourism, and business support. Africa, Latin America, and the Caribbean are all expected to see declines in their services exports this year.

Moutiou Adjibi Nourou