Asia Set Out to Surpass North America and Europe

Picture Credit: Port Technology

The World Trade Organization (WTO) has revised its 2025 global trade growth forecast upward to 0.9%, driven largely by a surge in U.S. imports earlier this year and an improved macroeconomic climate. However, fresh tariff hikes—particularly those implemented on August 7—are expected to dampen momentum in the second half of 2025 and into 2026.

WTO Director-General Ngozi Okonjo-Iweala noted that frontloaded imports and stronger economic conditions have boosted near-term prospects, but warned that tariff uncertainty continues to weigh heavily on business confidence, investment and supply chains. While a damaging cycle of retaliatory trade measures has been avoided so far, the risk remains.

Asia is expected to remain the strongest driver of global trade growth this year, with exports now projected to rise by 4.9% compared to the April forecast of 1.6%. North America’s imports are forecast to decline by 8.3%, a smaller drop than previously expected due to heavy frontloading in the first quarter. Europe’s outlook has weakened, shifting from a moderately positive contribution to slightly negative, with exports expected to contract by 0.9% and imports to grow only 0.4%. Oil-producing regions, meanwhile, are set to experience slower trade growth as falling oil prices reduce export revenues and dampen import demand.

The upward revision in the forecast is supported by three main factors. The first is the early surge in imports, particularly in the United States, where volumes rose 11% year-on-year in the first half of 2025, including a sharp 14% jump in the first quarter followed by a 16% decline in the second. While this frontloading has temporarily boosted trade, it is expected to lead to softer demand in the months ahead. The second is an improved macroeconomic climate, aided by a weaker U.S. dollar, which is easing financial pressures on developing economies, and lower oil prices, which are supporting manufacturing nations. The third is the mixed impact of recent tariff measures: while trade truces and certain exemptions have provided relief, higher “reciprocal” tariffs introduced in early August are expected to weigh increasingly on imports and exports later this year and into 2026.

The WTO said it will continue to monitor these developments closely, with a focus on safeguarding stability and predictability in the global trading system and assessing how the latest measures affect trade conducted under Most Favoured Nation (MFN) rules.