When President Trump unveiled sweeping ‘Liberation Day’ tariffs on imports from more than 180 countries in April 2025, trade economists braced for contraction. The World Trade Organization’s initial forecast reflected that pessimism, projecting a 0.2% decline in world merchandise trade volume for the year, with a possible 1.5% drop under worse-case scenarios.
A forecast reversed, twice
That prediction did not hold. By August, the WTO had revised its outlook to 0.9% growth, pointing to companies frontloading imports ahead of anticipated tariff hikes. By October, the figure had climbed further still, to 2.4% growth for 2025, even as the organisation trimmed its 2026 forecast from 1.8% to 0.5%, anticipating that the boost from early ordering would fade.
Global merchandise trade volume grew 4.9% year-on-year in the first half of 2025 alone. UNCTAD’s December 2025 Global Trade Update went further, reporting that both goods and services trade were on track to reach record levels for the year, with strong expansion in the second half.
“countries’ measured response to tariff changes in general, the growth potential of AI, as well as increased trade among the rest of the world — particularly among emerging economies — helped ease trade setbacks in 2025.” — Ngozi Okonjo-Iweala, WTO Director-General
Rerouted, not eliminated
A key reason for the resilience, according to the brief’s analysts, is that the US tariffs have been discriminatory rather than universal, applying different rates to different trading partners. That has redirected trade flows rather than destroyed them. Direct trade between the US and China fell sharply in tariff-hit consumer goods, but Chinese exporters responded by cutting prices and shifting sales toward Europe, Southeast Asia and other emerging markets, according to the brief. So-called ‘connector economies’ such as Vietnam, Mexico and India have absorbed much of the rerouted flow between the US and China, Allianz Trade notes in its analysis of 2025 trade patterns.
A separate driver has been demand for artificial intelligence hardware. The McKinsey Global Institute found that global shipments of AI-related chips, servers and networking equipment surged 37% in 2025, including a 66% jump in such imports into the United States itself, even as tariffs targeted other categories of goods.
Still, the shift has not been costless. A Peterson Institute for International Economics analysis found little reconfiguration of trade shares between the US and 19 major trading partners through October 2025, but two-way US trade with those partners grew just 3.6%, compared with 6.3% growth for world trade overall. The US effective tariff rate itself rose from under 5% in 2024 to roughly 17% by late 2025, according to TD Economics, a substantial increase even if it has not produced the contraction many expected.
Uncertainty lingers despite the numbers
The WTO recorded that imports worth $2,640 billion, 11.1% of global imports, were affected by new tariffs and trade measures in the year to mid-October 2025, more than four times the $611 billion recorded in the prior 12 months. That scale of disruption sits uneasily alongside the headline growth figures, and business groups say the aggregate resilience masks real friction for individual companies.
“From a business perspective, the real problem is uncertainty. Companies simply don’t know what is going to happen next.” — John W.H. Denton AO, Secretary General, International Chamber of Commerce
That uncertainty deepened following a November 2025 US Supreme Court ruling on the legality of Trump’s tariffs. The ICC said global trade flows remained broadly resilient even so, though legal and policy questions continued to weigh on business investment decisions. Denton, discussing the tariffs’ legal footing, noted there is debate over which authorities are being invoked and “even whether some of these measures will ultimately stand up in court.”
By March 2026, the WTO’s outlook still pointed to resilience, this time crediting trade in high-technology products, digitally delivered services, supply-chain adaptation and the fact that major economies had avoided tit-for-tat retaliatory tariffs. Okonjo-Iweala credited part of the strength to the “rules-based multilateral trading system,” while cautioning that “complacency is not an option.” The WTO’s updated projection put global GDP growth at 2.9% for 2025, moderating to 2.8% in 2026 and 2027, with the Middle East conflict and energy prices flagged as downside risks.
This article is free to read. It always will be — no paywall, no account, no tracking.