World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala has raised alarm over new U.S. trade tariffs introduced by President Donald Trump, cautioning that the sweeping measures could lead to a sharp decline in global trade this year.
Following the announcement of an expansive set of tariffs—including a blanket 10% levy on imports from all countries and steeper penalties targeting key partners like China and the European Union—Okonjo-Iweala cautioned that the global economy could suffer significant repercussions.
“These measures would have substantial implications for global trade and economic growth prospects,” she said Thursday in a statement responding to the U.S. action.
Initial projections by the WTO now anticipate a potential 1% reduction in worldwide merchandise trade volumes for the year—nearly four percentage points below the organization’s earlier forecast.
“While the situation is rapidly evolving, our initial estimates suggest that these measures, coupled with those introduced since the beginning of the year, could lead to an overall contraction of around 1 percent in global merchandise trade volumes this year,” Okonjo-Iweala said.
She emphasized the risk of an escalating tariff war, warning of tit-for-tat retaliation from affected nations that could amplify the damage.
“I’m deeply concerned about this decline and the potential for escalation into a tariff war with a cycle of retaliatory measures that lead to further declines in trade,” she warned.
Despite the aggressive U.S. trade posture, Okonjo-Iweala noted that most global commerce still takes place under the WTO’s Most-Favoured-Nation (MFN) rules, which mandate equal treatment among trading partners.
“Our estimates now indicate that this share currently stands at 74 percent, down from around 80 percent at the beginning of the year,” she said. “WTO members must stand together to safeguard these gains.”
She concluded by urging WTO member states to use the organization as a tool for dialogue and de-escalation. “The WTO was established to serve precisely in moments like this — as a platform for dialogue, to prevent trade conflicts from escalating, and to support an open and predictable trading environment,” she said.
