Donald Trump’s tariff plans will cause global trade to shrink this year, the World Trade Organisation said on Wednesday as it warned of “unintended consequences” from the changes.

Trade declines will be particularly steep in North America even without the stiffest tariffs, it said, with exports there expected to fall this year by 12.6 per cent and imports by 9.6 per cent.

It said the volume of trade in goods worldwide is likely to decrease by 0.2 per cent during 2025 because of Mr Trump’s shifting tariffs and his standoff with China – and could drop further if he follows through on his threatened toughest “reciprocal” tariffs.

Trade in goods worldwide would slump by 1.5 per cent if Mr Trump continues to escalate his tariffs on nations that fight back with reciprocal import fees, the WTO said, mainly because of the impact of uncertainty on business confidence.

Mr Trump suspended the toughest set of tariffs for 90 days earlier this month, so more than 70 countries have a chance to address US trade concerns. Meanwhile, he is increasing taxes on Chinese imports to 145 per cent and engaging in a lengthy back and forth with Canada and Mexico about tariffs on their goods.

Despite the 90-day pause, “the enduring uncertainty threatens to act as a brake on global growth, with severe negative consequences for the world, the most vulnerable economies in particular,” WTO director-general Ngozi Okonjo-Iweala said in a statement.

“Our simulations show that trade policy uncertainty has a significant dampening effect on trade flows, reducing exports and weakening economic activity,” WTO chief economist Ralph Ossa said in the statement.

“Moreover, tariffs are a policy lever with wide-ranging and often unintended consequences. In a world of growing trade tensions, a clear-eyed view of those trade-offs is more important than ever.”