WTO cuts global trade outlook, citing current tensions

The World Trade Organization (WTO) has cut its forecasts for global trade growth from 4.4 per cent to 3.9 per cent, and has predicted growth to slow still further in 2019, to 3.7 per cent, the Associated Press reports. WTO Director General Roberto Azevedo cited “the heightened tensions… between major trading partners” for the downgrade.

The US-China trade war continued to shake global markets this week after the US imposed further tariffs of US$200 billion worth of Chinese imports, and Beijing responded with tariffs on US$60 billion of American goods.

Both China and the US are expected to see economic pain over the course of the trade war. Bloomberg reports former Treasury Secretary Henry Paulson’s comments that the US risked facing “dangerous” long-term risks and that the trade war “[does not] benefit anyone”. The South China Morning Post reports that China is also facing  economic challenges; Shanghai stocks and the value of the yuan have fallen at an unprecedented rate. However, the Financial Times reports that Chinese exporters continue to enjoy stable business conditions.

China has sought to re-emphasise the mutual benefits of trade, and argued the trade war is unnecessary, Xinhua reports. However, at the annual United Nations General Assembly, US President Donald Trump accused China of using trade policy to meddle in US elections and reiterated his administration’s continued commitment to the trade war, Channel News Asia reports.

The WTO downgrade follows ADB’s revision of its growth prediction for Asia in 2019, due to the ongoing trade tensions.

The US-China trade war will be a key topic of discussion at Asia House’s major conference, Asia Trade in the New Global Order, to be held in Singapore on 22 November. WTO Chief Economist Robert Koopman will be speaking at the conference on the continued impact of the global shifts in trade and what these mean for business.