September 27, 2018: The World Trade Organization on Thursday downgraded its global trade forecast for the year 2018 and 2019, pointing to escalating trade tensions around the world as the reasons for this gloomy picture.
“Escalating trade tensions and tighter credit market conditions in important markets will slow trade growth for the rest of this year and in 2019,” the WTO warned in a statement. “Trade will continue to expand but at a more moderate pace than previously forecast.”
The organization now expects merchandise trade volumes to expand 3.9 percent this year and 3.7 percent in 2019, down from an April forecast of 4.4 percent and 4.0 percent growth, respectively.
The WTO's downgrade comes only days after US President Donald Trump's tariffs on another $200 billion of Chinese imports took effect, with Beijing accusing Washington of “economic intimidation.”
The latest volley against Beijing brings the value of goods hit by duties to more than $250 billion, roughly half of China's exports to the United States.
The WTO said trade measures and threats since its last report in April were only having a “modest” economic effect for now, “but the uncertainty they generate may already be having an impact through reduced investment spending”.
