WTO Chief warns of global trade contraction as US tariffs spark alarm
2 Min Read
According to the WTO, the share of global trade conducted under Most-Favored-Nation (MFN) terms — which are generally non-discriminatory — has already dropped from 80% to 74% since the beginning of the year, signaling the erosion of predictable trade rules.
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Employee Jon Vazquez-DeAnda cuts keys for a customer at employee-owned Clark Devon Hardware, Wednesday, April 2, 2025, in Chicago, US (AP Photo/Erin Hooley)
World Trade Organization Director-General Ngozi Okonjo-Iweala warned Thursday that escalating US tariff measures could lead to a sharp decline in global trade, as pressure mounts from member countries seeking clarity on the consequences of the United States' economic policy shift.
Speaking at a press briefing, Okonjo-Iweala said multiple WTO members have formally requested the organization to assess the impact of Washington's recent tariff wave on their national economies. Since the start of 2025, the US has imposed sweeping duties on a wide range of goods from major trading partners, including China and the European Union — a move Okonjo-Iweala believes risks triggering a broad trade conflict.
"The impact on global trade prospects and economic growth is becoming increasingly clear," she said, warning that retaliatory actions could spiral into a wider tariff war. She projected that US tariffs implemented so far this year could reduce global merchandise trade by approximately 1% in 2025, marking a significant downward revision from earlier forecasts.
According to the WTO, the share of global trade conducted under Most-Favored-Nation (MFN) terms — which are generally non-discriminatory — has already dropped from 80% to 74% since the beginning of the year, signaling the erosion of predictable trade rules.
Okonjo-Iweala also underscored the risk of trade diversion and market fragmentation, urging countries to respond to current pressures with restraint and a renewed commitment to multilateral dialogue. "The potential for further disruption remains high," she added, referencing concerns voiced by European, Asian, and Latin American leaders in recent days.
The WTO's warning lands as financial markets reel from the fallout. Major indices such as the Nasdaq and FTSE 100 posted their steepest one-day losses in months, and tech giants like Apple saw steep valuation declines due to their exposure to international supply chains.
Die Wall Street eröffnete deutlich niedriger: Der S&P 500 fiel um 3,34 %, der Dow Jones Industrial Average um 2,69 % und der Nasdaq Composite fiel nach Markteröffnung um 4,52 %.
— Andy Schneider (@AndySch64494719) April 3, 2025
Weltweit fallen die Kurse. Der Euro wird stärker, der Ölpreis fällt. Haste jut jemacht Donald 🤷♀️ pic.twitter.com/4JpxdSGD5O
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