WTO warns US tariffs may slash US-China trade by 80%
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WTO Director-General Ngozi Okonjo-Iweala said Wednesday that merchandise trade between the two economic giants could contract by as much as 80%, with far-reaching consequences.
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The WTO headquarters at the Centre William Rappard in Geneva, Switzerland (AFP)
The World Trade Organization (WTO) has issued a stark warning about the global consequences of the deepening trade conflict between the United States and China.
WTO Director-General Ngozi Okonjo-Iweala said Wednesday that merchandise trade between the two economic giants could contract by as much as 80%, with far-reaching consequences.
"The escalating trade tensions between the United States and China pose a significant risk of a sharp contraction in bilateral trade. Our preliminary projections suggest that merchandise trade between these two economies could decrease by as much as 80%," Okonjo-Iweala stated.
The WTO noted that the economic fallout would not be limited to the U.S. and China alone, but would reverberate globally. "The negative macroeconomic effects of the tariffs will not only affect the US and China, but will also spread to other economies," Okonjo-Iweala warned.
The organization has also flagged the potential long-term damage of splitting the global economy into rival trade blocs—a path encouraged by protectionist policies. According to the WTO, such a division could shrink global GDP by nearly 7%, reflecting the urgent need to return to dialogue and multilateral cooperation.
Her remarks come in the wake of a sharp unilateral move by US President Donald Trump, who raised tariffs on Chinese goods to 125%, accusing Beijing of showing "a lack of respect" for global markets. "Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately," Trump declared on Truth Social. In response, China implemented its own 84% tariff on US imports—a proportionate move aimed at defending its economic interests while preserving global trade norms.
In a revealing statement, US Treasury Secretary Scott Bessent acknowledged that this dramatic escalation was not spontaneous, but carefully orchestrated. "This was his strategy all along, and you might even say that he goaded China into a bad position," Bessent told reporters.
Read more: WTO Chief warns of global trade contraction as US tariffs spark alarm
