The World Trade Organization sharply cut its forecast for global merchandise trade from solid growth to a decline on Wednesday, saying further U.S. tariffs and spillover effects could lead to the heaviest slump since the height of the COVID pandemic.

The WTO has deemed the impact of Trump's tariff overhaul and ongoing uncertainty a "crisis" and warned that if the situation deteriorates, trade flows could be reduced, leading to a 0.2 percent fall in global merchandise trade in 2025.

The World Trade Organization (WTO) has forecast that global trade will fall this year because of US President Donald Trump's tariffs. It added "severe downside risks", including reciprocal tariffs and political uncertainty, could lead to an even sharper decline in global goods trade.