The World Trade Organization's April 2025 forecast projected world merchandise trade volume to decline 0.2% in 2025 — a swing of more than four percentage points from the 2.7% growth it had projected the previous October, per the WTO's published forecast. The stated driver was new tariff measures, chiefly between the United States and China, whose bilateral goods trade the WTO estimated could fall by as much as 80% in the sharply escalated scenario it modeled. The WTO's June 2025 revision moderated the year's decline to 2.2% — still a contraction, per the updated release.
Reliable News publishes sourced analysis; the fact record and the reading are kept separate below.
What changed between the two forecasts?
The April number assumed the tariff levels in force on April 14, including the U.S. measures announced that month and China's retaliation. The June revision reflected the May 12 Geneva agreement, under which both sides paused escalation for 90 days — U.S. tariffs on Chinese goods falling to 30% and China's on U.S. goods to 10% for the pause period, per the joint statement from the talks. Container shipping rates and trans-Pacific bookings, which had fallen sharply in April, rebounded within weeks, per freight-data releases from the major shipping indices.
The record is unsettled in one direction worth naming: the WTO itself flags that forecast uncertainty exceeded its usual range, as tariff timelines shifted weekly through the spring of 2025.
Who do the measures actually hit?
The documented distribution runs through third countries. U.S. goods imports from China fell year-on-year through 2025's middle quarters, while imports from Vietnam, Mexico, and India rose — transshipment and rerouting, per U.S. Census Bureau trade releases. The front-loading is visible too: importers pulled orders forward ahead of announced effective dates, a spike-then-trough pattern the Census monthly data shows distinctly.
The analysis: the 2025 record shows tariff levels functioning as a volatility instrument more than a stable policy regime — the 90-day truce structure repeats, and each deadline moves volumes before it arrives. For importers, the cost is planning; for third countries, the gain is rerouted trade that can reverse as quickly as it came. What would change this reading: a durable multi-year agreement fixing tariff levels, which the record through mid-2025 does not show.
For more context, read How the Fed's Dollar Swap Lines Actually Work.
For more context, read wingham.
For more context, read royal.