The World Trade Organization (WTO) on Tuesday revised its estimate for growth in world merchandise trade rather sharply to 2.4% in 2025, from the 0.9% forecast in August, citing better-than-expected performance in the first half.
Global goods trade growth came in at 4.9% in the first half of the year, as measured by the average of exports and imports. The value of world merchandise trade in current US dollar terms was up 6% on year in the first six months of 2025 following a 2% increase in 2024.
In April, the WTO had estimated a 0.2% contraction of world merchandise trade in volume terms, when the first signs of tariff wars were emerging from the United States. While 2025 will see growth, the forecast for 2026 has been revised to 0.5% from 2.5% in April.
“This indicates that the tariff impact has shifted into 2026, with the slight improvement reflecting that some inventory build up in early 2025–particularly of durable goods–will not be fully reversed in 2026,” the Global Trade Outlook and Statistics report released by WTO said.
“Drivers of this increase are the importers fron-tloading orders to get ahead of future tariff hikes or retaliation. The other reason is the soaring demand for heavily traded AI-related products like semiconductors, computers, servers and manufacturing equipment to feed the ongoing boom in AI-related capital investment,” Director General of the WTO Ngozi Okonjo-Iweala said at the launch of the report.
Inventories in the US are at record levels by dollar value. In the first quarter, the value of North America’s imports surged 13.2% year-on-year, driven by pharmaceuticals and precious metals, mostly gold, she said. Other import drivers in North America were machinery, motor vehicles, lumber, construction equipment, and non-durable goods
In the first half of the year, 42% of global trade growth came from AI-related goods – far out of proportion to their 15% share in world trade.
While there were tariff-led disturbances, trade continued to grow among the rest of the world, particularly South-South trade.
“As Members mostly continue to trade with each other normally, supply chains are going where the demand is…. South-South Trade grew 8% year-on-year, in value terms, in the first half of 2025, compared to 6% for world trade overall. Our very rough estimates suggest South-South trade involving partners other than China is growing even faster, up around 9%,” she said.
Services trade continues to outpace the trade in goods with the new report projecting 4.6% growth in 2025 in volume terms. This is up slightly from April estimates, but still below the baseline forecast from the start of the year, the WTO DG said.
Services export growth is now expected to slow from 6.8% in 2024 to 4.6% in 2025 and 4.4% in 2026.
Services trade is not directly subject to tariffs, but it is indirectly affected by tariffs through slower GDP growth and reduced demand for things like transport and tourism. AI is making its presence felt here too, bolstering demand for computer services.