The World Trade Organization (WTO) has issued a stark warning about the impact of U.S. President Donald Trump ’s aggressive trade policies, forecasting that global trade in goods will shrink in 2025 instead of growing as previously expected.In its latest update, the WTO said it had originally projected global goods trade to grow by 2.7% this year. But due to a surge in tariffs led by Washington, that figure has now been revised down sharply to a 0.2% decline.WTO Director-General Ngozi Okonjo-Iweala pointed to the growing rift between the United States and China as a particularly troubling development. “Trade between the two geopolitical rivals was expected to plunge by 81%–91% without exemptions for tech products such as smartphones,” she said. “This is tantamount to a decoupling of the two economies, and would have far-reaching consequences.”The Geneva-based institution emphasized that the escalation in tariffs and uncertainty over trade policy were fueling global instability. “The outlook for global trade has deteriorated sharply due to a surge in tariffs and trade policy uncertainty,” the WTO warned in its report.The broader economic implications are also significant. The WTO cut its global GDP forecast for 2025 from 2.8% to 2.2%, citing trade disruptions as a major drag on growth.Since returning to the White House, Trump has imposed a blanket 10% tariff on all imports, with steeper levies targeting Chinese goods, reaching as high as 145% in some sectors. Industries like automobiles and steel have been hit especially hard.While trade with other regions is still expected to grow modestly, the WTO predicts a sharp drop in commerce involving the United States. The most immediate impact will be felt in U.S.-linked trade flows, which are already slowing.Trump’s “reciprocal” tariffs were temporarily paused last week for 90 days after a turbulent reaction from global financial markets. But the WTO warns that if these measures are reinstated, the damage will be even greater. In that scenario, global goods trade could fall by as much as 0.8%.With concerns rising over a deepening trade rift between the world’s two largest economies, the WTO has urged countries to re-engage in multilateral cooperation to prevent further disruption.“The long-term costs of decoupling could be steep,” Okonjo-Iweala warned, “and the ripple effects will not be limited to just the U.S. and China.”