Enduring trade tensions and weakening economies worldwide are causing a significant decline in global commerce, the World Trade Organization warned on Tuesday. The instability led the Geneva-based organization to cut its forecast for trade volume growth to just 1.2 percent in 2019, an over 50 percent drop from an earlier estimate.
"Beyond their direct effects, trade conflicts heighten uncertainty, which is leading some businesses to delay the productivity-enhancing investments that are essential to raising living standards," said Roberto Azevêdo, the WTO's director-general.
The WTO took particular issue with trade policies dominated by punitive tariffs, which its report said can "produce a destructive cycle of recrimination." Financial volatility and looming geopolitical strife, along with escalating trade wars, could also trigger an accelerated downturn, the report said.
"Resolving trade disagreements would allow WTO members to avoid such costs," Azevêdo added. "The multilateral trading system remains the most important global forum for settling differences and providing solutions for the challenges of the 21st century global economy."
Fitch Ratings, a leading London-based financial information firm, also lowered its economic outlook this week, citing similar trade concerns as the WTO. For both 2019 and 2020, Fitch lowered its global GDP growth forecasts by 2 percent, dropping the estimates down to 2.6 percent and 2.5 percent, respectively. The WTO also lowered its trade growth forecast for 2020 from 3 percent to 2.7 percent.
"There can be few precedents since the 1930s of global growth prospects being affected so significantly by trade policy disruptions," said Brian Coulton, Fitch's chief economist.
The lowered guidance comes as governments and economists around the world are increasingly cautioning of an economic slowdown.
In the U.S., consumer spending — one of the primary drivers of economic growth — fell in August to just 0.1 percent growth, a sharp decline from the 0.5 percent growth in July, according to the Commerce Department's Bureau of Economic Analysis. The U.S. Federal Reserve also cut interest rates twice in recent months to spur growth and sustain expansion.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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