WTO Downgrades Global Trade Growth Forecasts
World Trade Organization (WTO) predicts world trade growth to be slower than previously thought in 2018 and 2019 amid escalation of the global trade war. According to updated forecasts, world trade in goods would grow by 3.9% in 2018, less than the 4.4% growth forecast in April. In 2019, trade growth is expected to be 3.7%, down from the WTO's previous forecast of 4.0% gain.
In its statement, the WTO noted, that some of the downside risks it had warned of in April had now materialized. Since the WTO's previous forecast, US President Donald Trump has launched a trade war by imposing tariffs on hundreds of billions of dollars of imports from China, which has hit back with tariffs of its own, as well as taxing aluminum and steel imports from around the world to protect American jobs.
On Monday, the biggest round of tariffs in an escalating bilateral trade war took effect. The Trump administration imposed additional tariffs on $200 billion of Chinese imports, dashed renewed hopes that trade talks between Beijing and Washington officials would defuse tensions between the world’s two largest economies. As a response, China announced counter-tariffs on $60 billion of US products.