Global trade outlook being damaged by Trump's tariffs
The outlook for global trade fell sharply in the first quarter and is at its weakest level since 2010, with the prospect of worse to come, according to the World Trade Organisation - a development that could spell trouble for the Irish economy.
The World Trade Outlook Indicator fell to a reading of 96.3 on a scale where 100 and above indicates expansion, while below that number indicates a contraction.
The closely watched indicator was published after US President Donald Trump ramped up his tariffs on imports from China last week, extending a trade war that could dent economic growth. And while he deferred a decision on car tariffs that could hit the EU, he kept the threat open.
"The outlook for trade could worsen further if heightened trade tensions are not resolved or if macroeconomic policy fails to adjust to changing circumstances," the World Trade Organisation (WTO) said in its monthly assessment of the prospects for trade.
The decline in the WTO's outlook was led by lower readings for international air freight, automobile production and sales (92.2), and agricultural raw materials (92.4).
The threat of a trade war between the United States and European Union over cars would hit Ireland hard as it is the most exposed to trade with America of any EU state.
In its April trade forecast, WTO director General Roberto Azevedo estimated that merchandise trade volume growth would fall to 2.6% this year, and the body's economists forecast that if a global trade war were to start this year, it would cut global economic growth by almost 2% by 2022.
Please log in or register with belfasttelegraph.co.uk for free access to this article.
For comparison, that figure is just shy of the 2.1% contraction in global output in the financial crisis in 2009.
President Trump has pressed ahead with his tariffs despite mounting evidence that they are damaging.