WTO Slashes 2026 Global Trade Forecast to 0.5% Amid Escalating Tariff Threats

The World Trade Organization (WTO) on January 26, 2026, delivered a stark warning to the global community, slashing its forecast for merchandise trade growth in 2026 to a meager 0.5%. This represents a significant downturn from the previous estimate of 1.8%. According to the WTO, the bleak outlook is primarily attributed to the delayed but full impact of tariff hikes implemented during the administration of former US President Donald Trump.

WTO Director-General Ngozi Okonjo-Iweala expressed deep concern over the forecast, which also predicts a slowdown in the growth of global services exports and import contractions for North America and Europe in 2026.

This pessimistic forecast from the WTO comes as the Trump administration continues to deploy aggressive trade tactics. President Trump has recently threatened to impose a 100% tariff on Canadian imports if Ottawa moves forward with a trade agreement with China, a move that creates significant uncertainty for supply chains, according to Supply Chain Dive. The administration has also threatened a 50% tariff on Canadian aircraft.

Adding to the tensions, the U.S. is also pressuring South Korea to fully implement their six-month-old trade agreement to avoid a potential tariff increase from 15% to 25%. The Japan Times reports that this pressure is exacerbated by U.S. frustration with South Korean digital-services regulations, which Washington believes could penalize American tech companies. These ongoing trade disputes and tariff threats exemplify the protectionist headwinds that the WTO warns are now severely constraining global economic growth.