Global trade may weaken this year to the slowest pace since the depths of the Great Recession due to the U.S.-China trade war. Slower trade levels could harm job creation as firms may need fewer workers to produce goods and services, the World Trade Organization said Tuesday.
The World Trade Organization said it expects volumes of traded goods to rise 1.2% this year, far below the 2.6% estimate it issued in April and the weakest since 2009.
Next year's growth was estimated to drop to 2.7% from 3.0%, but the organization warned that still depends on solving trade disputes.
The U.S. and China in particular are in a wide-ranging dispute that has led to new tariffs on hundreds of billions of dollars' worth of traded goods. There is little expectation of an imminent resolution to the disagreement, which continues to sap economic growth.
"The darkening outlook for trade is discouraging but not unexpected," said WTO chief Roberto Azevêdo.
He added a warning about job creation, noting that it could be crimped "as firms employ fewer workers to produce goods and services for export."
Already, the U.S. has taken abecause of the trade war, according to Moody's Analytics' chief economist Mark Zandi in a September report. The White House's imposition of tariffs on hundreds of billions worth of Chinese imports has resulted in 300,000 fewer jobs being created and reduced U.S. gross domestic product by an estimated 0.3%, he estimated.
The WTO sees continued risks from the trade wars, saying that "further rounds of tariffs and retaliation could produce a destructive cycle of recrimination."
The organization noted that some economies are slowing anyway and that other issues, such as Britain's uncertain exit from the European Union, are adding to uncertainty for businesses trading goods.