WTO warns of 'most serious and sustained' trade disruptions

The World Trade Organization (WTO) has warned that the global trading system is facing its most serious and sustained disruption since its creation 80 years ago, according to its annual report released on September 15. The report, authored by the WTO's director general Ngozi Okonjo-Iweala, highlights a range of factors contributing to the challenges, including shifts in economic power, the increasing role of government intervention in markets, and geopolitical tensions.

The WTO's report paints a bleak picture of the future, projecting that a return to unilateral trade policy could slash global GDP by around five percent and reduce exports by 18.6 percent by 2050. The report also warns that the erosion of multilateral trade cooperation could disproportionately impact the smallest and poorest economies.

The outlook darkened further following US President Donald Trump's launch of a tariff blitz upon his return to the White House in January 2025, combined with rising geopolitical tensions, particularly in the Middle East. The WTO pointed to these factors, along with shifts in economic power and the growing diversity of government intervention in markets, as key contributors to the disruption.

While global trade figures remain robust, the share of global trade operating under WTO rules has declined from 80 percent two years ago to 72 percent in 2025, according to the WTO's chief economist Robert Staiger. Staiger also noted that the trend of increasing tariffs and trade restrictions covering 11 percent of global imports is the highest in 15 years.

Despite these challenges, the WTO remains the linchpin of the rules-based global trading system. The organization's report emphasizes that if members collaborate to reinforce multilateral trade cooperation, safeguard what works, and reform what doesn't, it could boost global GDP by roughly three percent. However, the WTO cautions against relying solely on the growth of trade in AI-enabling goods, as this may mask the broader decline in global trade.