// ECONOMIC AND SOCIAL SECURITY: TRADE, INVESTMENT AND INFRASTRUCTURE
Seizing the opportunities within the global trade crisis
With trade tensions rising and global growth stalling, G7 leaders can chart a new course, reinvigorating the multilateral trading system to reinforce cooperation in a fractured world
Ngozi Okonjo-Iweala, director general, World Trade Organization
W hen G7 leaders meet in Kanan- askis, global trade disruptions will loom as prominently as the Rocky Mountains. Trade policy uncertainty is at record highs. Real-time indicators point to falling demand and investment as anx- ious businesses and consumers sit on their hands. The World Trade Organiztion issued our annual trade forecast in mid-April, days after the US announced far-reach- ing tariffs – then subsequently paused many of the higher duties. Our econo- mists now project a 0.2% contraction in global merchandise trade volumes in 2025 – nearly three percentage points below the growth expected. The con- traction could deepen to 1.5% if the paused US reciprocal tariffs are rein- stated and trade tensions and further uncertainty escalate among other countries. We have been urging WTO members to engage in dialogue with Washington and with each other to lower the tem- perature and minimise the economic damage. There have been welcome
moves in this regard. Following high- level talks in Geneva in mid-May, the US and China lowered bilateral tariffs by 115 percentage points from pro- hibitive levels for 90 days. They also insisted they did not want to decouple their trading relationship. WTO econ-
omists estimate that should this truce hold, it could lift global goods trade by 0.3 percentage points from the April projection. The easing of certain US car tariffs could add a further 0.2 percent- age points, cumulatively leading to 0.3% growth in global goods trade in 2025. Nonetheless, risks remain on the downside. But while we should be con- cerned, this is a time for concerted action, not despair. Policymakers looking to limit the damage to global trade and growth prospects have a strong foundation to build on. Roughly 74% of global goods
87 % of global goods trade takes place among the rest of the world outside the US
46 // G7 CANADA: THE KANANASKIS SUMMIT 2025
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