US – China Trade War: WTO Expects International Trade To Slow Down To Weakest Level Since 2009

The World Trade Organization (WTO) said Tuesday that it expects world merchandise trade volumes to rise by only 1.2% in 2019, its lowest level since the Great Recession in 2009. The WTO estimated the figure to be 2.6% in April but revised it due to the ongoing U.S.-China trade war.

WTO chief Roberto Azevedo said that the "darkening outlook for trade is discouraging but not unexpected."

The WTO also said that estimates for 2020 growth have dropped to 2.7% from 3.0% and that "further rounds of tariffs and retaliation could produce a destructive cycle of recrimination."

President Donald Trump increased tariffs 30% on $250 billion of Chinese goods that go into effect on Oct. 15. Chinese and American negotiators will also meet this month, as Chinese retaliatory tariffs have hurt American farmers.

Although companies such as Walmart have said that they will have to increase prices due to the tariffs, Republicans in Congress have stood up for Trump, with Rep. Tim Burchett, R-Tenn., saying that "it's the only way" to change the U.S.-China trade relationship. Burchett has said that the U.S. has to "stand up" to Chinese "bullies."

Trump contends that tariffs will prevent China from flooding the global market with cheap exports and that it will revive U.S. manufacturing. On Tuesday, the U.S. ISM manufacturing managers' index reading for September showed its lowest level since June 2009.

The WTO also believes that other uncertainties, such as the U.K.'s controversial exit from the EU on Oct. 31, along with shifting monetary policies, could also add to global trade tensions.