The WTO underscored that the latest forecast marks a "reversal" from 2024, when the volume of world merchandise trade grew 2.9 percent, while gross domestic product (GDP) expanded by 2.8 percent.
The large number of new tariffs introduced since January this year prompted the WTO to downgrade its trade growth forecast for 2025 which had been positive at the start of the year.
WTO Director-General Ngozi Okonjo-Iweala said the trade policy uncertainty threatens to "act as a brake on global growth," with severe negative consequences for the world, particularly the most vulnerable economies.
Speaking at a press conference on the report, the WTO chief stressed that a reinstatement of the "reciprocal tariffs" could carry severe consequences and urged the exemption of the least developed countries from such tariffs.
The WTO report showed that services trade, which is not directly subject to tariffs, is also expected to be negatively affected.
The volume of global services trade is forecast to grow by 4.0 percent in 2025, around 1 percentage point less than expected.
Europe will see most services trade growth, with exports expected to grow by 5.0 percent in 2025, while services trade growth in North America will slow to 1.6 percent, the WTO said.
The WTO further warned of severe downside risks posed by the reinstatement of the U.S. "reciprocal tariffs" and spillover of trade policy uncertainty, which could lead to an even sharper decline of 1.5 percent in global goods trade in 2025.
The WTO noted big regional disparities regarding the impact on goods trade by recent tariff measures in place as of April 14.
North America is expected to see a "particularly steep" decline in goods trade, with exports forecast to drop by 12.6 percent, according to the WTO.
Meanwhile, Asia is expected to post modest trade growth, with exports and imports both forecast to grow by 1.6 percent.
Europe is expected to register a 1.0 percent increase in exports and a 1.9 percent rise in imports.
The volume of global merchandise trade is expected to decline by 0.2 percent in 2025 under current tariff conditions, nearly 3 percentage points lower than the previous forecast based on a "low tariff" scenario, the World Trade Organization (WTO) said in its latest Global Trade Outlook and Statistics report released on Wednesday.
