WTO Cuts 2026 Global Trade Growth Forecast to 1.8% Amid Trump Tariffs

The World Trade Organization (WTO) has lowered its forecast for global merchandise trade growth in 2026 to 1.8%, down from a previous estimate of 2.5%, citing the impact of higher U.S. tariffs.

The WTO said the revised outlook is largely driven by shifts in U.S. import patterns but remains well below the pre-tariff projection of 2.7%. In its latest trade update, the organization warned that recent tariff changes will have a broadly negative effect on the global trade outlook.

According to the report, the elevated “reciprocal tariffs” imposed by the United States on August 7, 2020, are expected to weigh heavily on U.S. imports and reduce exports from its trading partners in the second half of 2025 and throughout 2026.

The WTO now expects global merchandise trade to grow by 0.9% in 2025, revising up its April forecast of a 0.2% contraction, which had been issued after Washington announced the tariffs and a temporary 90-day suspension for some of them.

The 2026 projection of 1.8% growth is significantly lower than the earlier 2.5% estimate.

Business Confidence and Supply Chains

WTO Director-General Ngozi Okonjo-Iweala said that uncertainty over tariffs continues to weigh heavily on business confidence, investment, and supply chains. “Uncertainty remains one of the most disruptive forces in the global trading environment,” she noted, adding that the world has so far avoided a broader cycle of retaliatory measures that could have severely damaged global trade.

The Trump administration has framed the so-called “reciprocal tariffs” as a response to countries acting contrary to WTO principles. Established three decades ago, the WTO was designed to set global trade rules, promote open markets, and discourage high tariffs and protectionist policies.

U.S. Trade Representative Jamieson Greer wrote in a New York Times op-ed this week that the U.S. is ushering in “a new era” in the global trade system. “The current system under the WTO framework is no longer sustainable,” he argued, adding that the U.S. had secured greater access to foreign markets in just a few months than years of WTO negotiations had achieved.