#TariffsPause

The recent tariff pause has brought some relief to the global trade landscape, but strong downside risks persist. According to the World Trade Organization (WTO), the volume of world merchandise trade is expected to decline by 0.2% in 2025, nearly three percentage points lower than expected under a "low tariff" baseline scenario. WTO Director-General Ngozi Okonjo-Iweala expressed concerns about the uncertainty surrounding trade policy, particularly the US-China standoff.

- *Tariff Escalation*: Reactivation of suspended "reciprocal tariffs" by the US could reduce global merchandise trade volume growth by 0.6 percentage points in 2025.

- *Trade Policy Uncertainty*: Spreading trade policy uncertainty could shave off another 0.8 percentage points, leading to a 1.5% decline in world merchandise trade in 2025.

Services Trade Impact*: Services trade, though not directly subject to tariffs, is expected to be adversely affected, with global commercial services trade growth forecast to slow down to 4.0%