WTO Warns Tariff Spiral Could Shave 1.2% From Global Growth
Geneva's mid-year update marks the most pessimistic outlook in five years as bilateral tariff retaliation accelerates between the United States, China and the EU.
The World Trade Organization's mid-year forecast, released in Geneva this morning, projects merchandise trade volume growth of just 0.6 percent in 2026, sharply lower than the 2.7 percent it expected in October.
Director-General Ngozi Okonjo-Iweala warned that the cumulative effect of bilateral tariff measures imposed since January now covers roughly 14 percent of global trade by value — the highest share since the 1930s.
The forecast assumes no further escalation. A worst-case scenario modelled by WTO economists, in which the United States and China each raise tariffs by an additional 10 percentage points, would subtract a further 0.7 percentage points from global GDP.
Multilateral institutions have struggled to reassert influence. Both the IMF and the OECD have echoed the WTO's warning, but trade ministers attending this month's G7 meeting in Tokyo offered no concrete commitments to de-escalate.
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