GENEVA - 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.

The WTO further warned of severe downside risks posed by the reinstatement of the US "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.

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The WTO said 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.

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.