The World Trade Organisation (WTO) has cut its forecast for global commerce growth on the back of Donald Trump’s trade wars.
The Geneva-based WTO on Thursday said that it now expects global merchandise trade volumes to expand by around 3.9 per cent in 2019, down from the central 4.4 per cent forecast it made in April.
Since then Donald Trump has levied imports on steel imports to the US, citing a national security justification, and threatened levies on EU car imports. And this month he imposed tariffs on a further $200bn of Chinese imports.
The WTO said that the “downside risks” of a trade war that it had identified in April had now come to pass.
“While trade growth remains strong, this downgrade reflects the heightened tensions that we are seeing between major trading partners,” said Roberto Azevêdo, the WTO’s director general.
“More than ever, it is critical for governments to work through their differences and show restraint.”
Downgraded forecast
Global merchandise trade volumes surged by 4.7 per cent in 2017 according to the WTO, as the world economy picked up speed.
This was the fastest rate since 2010.
Merchandise trade growth in 2017 – the fastest since 2010
The US has been undermining the ability of the WTO to function by blocking the appointment of judges to its arbitration body.
In August President Trump threatened to pull the US out of the WTO entirely “if they don’t shape up”.
Despite all this, hardline Brexiteers have been urging the UK government to leave the European Union single market and customs union without a withdrawal agreement next March and trade with the rest of the world on WTO rules, which, even when enforced, do little more than prevent the most egregious forms of discrimination on trade.
The WTO said the latest downward revisions to its trade forecast was consistent with its World Trade Outlook Indicator, which has pointed to slowing momentum since the first quarter of 2018.
