WTO Sees Full Impact of US Tariffs Hitting Trade Growth in 2026

(Bloomberg) —

The growth of global goods trade is expected to slow sharply next year after a surprisingly resilient first half of 2025, reflecting a delayed drag on international commerce from US President Donald Trump’s tariffs, the World Trade Organization said.

Merchandise trade volumes are forecast to rise 2.4% this year, the Geneva-based forum said in a report Tuesday — much faster than the 0.9% growth it predicted in August. The scale of that upgrade was almost matched by the downgrade for 2026: A 0.5% rise is now expected, versus the 1.8% advance seen two months ago.

Those diverging outlooks suggest the full force of Trump’s country-by-country and sectoral levies on US imports may be postponed until next year, the WTO said.

“With higher tariffs now in place and trade policy still highly uncertain, front-loading of purchases is expected to unwind as accumulated inventories are drawn down and as GDP growth slows,” the report said. “Possible signs of weakness in trade and manufacturing output have been observed in developed economies, including reduced business and consumer confidence and slower growth in employment and incomes.”

Ngozi Okonjo-Iweala, the WTO director-general, said during a press briefing that the resilience demonstrated in the face of “unilateral” measures illustrates that there’s a “core” group of economies that continues to provide stability in the global trading system.

Three-quarters of world commerce is still conducted on WTO terms, she said.

AI Driver

The main drivers of the stronger first-half activity globally were shipments of AI-related goods, the WTO said.

Based on about 100 such product lines — including semiconductors and processors, finished computers, cloud servers and telecommunications gear — trade in the category expanded by more than 20% from a year earlier, it said.

In contrast, trade growth in non-AI goods amounted to less than 4%, according to the WTO report.

The WTO pointed out that while AI-related products account for less than a tenth of world merchandise trade in the first half of the year, “they contributed nearly half of overall trade growth in this period.”

In 2026, the trade slowdown will arrive “as the global economy cools and as the full impact of higher tariffs is finally felt for a full year,” the WTO said.

–With assistance from Zoe Schneeweiss and Craig Stirling.

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