- The Director-General of the World Trade Organisation, Ngozi Okonjo-Iweala, called for an end to the escalating trade war between the United States of America and China
- She said the trade tension would extend to other countries
- Okonjo-Iweala said the US-China tariff war could reduce merchandise trade between them by 80 per cent
The Director-General of the World Trade Organisation (WTO), Ngozi Okonjo-Iweala, has called for an end to the escalating trade war between the United States of America (USA) and China.
She warned that the tension between both countries would not only be restricted to the countries but also extend to other nations, especially the least developed ones.
Okonjo-Iweala said this in a statement released on Wednesday, April 9, and shared on her official X handle.
“The negative macroeconomic effects will not be confined to the United States and China but will extend to other economies, especially the least developed nations,” the statement read.
Recall that US President, Donald Trump, imposed sweeping tariffs on over 50 countries of the world on April 2, on all US imports, leading to a retaliatory tariff slam from China.
Trump further announced a 90-day relaxation of the tariffs on most nations except China, jerking up tariffs on the country by 125 per cent.
On Thursday, April 10, China announced an 84 per cent retaliatory tariff on all US goods, effective immediately.
US-China tariff war could reduce merchandise trade by 80%
The WTO DG also stated that the trade tensions between the US and China could reduce merchandise trade between the two economies by 80 per cent and affect the rest of the world’s economy.
Okonjo-Iweala further said that the US and China accounted for three per cent of the global trade together, warning that the conflict could have severe implications on the global economic outlook.
“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 per cent.
“This tit-for-tat approach between the world’s two largest economies — whose bilateral trade accounts for roughly three per cent of global trade — carries wider implications that could severely damage the global economic outlook.
“Our assessments, informed by the latest developments, highlight the substantial risks associated with further escalation,” she stated.
Polarisation of global trade, economy worrisome – Okonjo-Iweala
Okonjo-Iweala further noted that the division of global trade and economy along two blocs raises concern.
She noted that such divisions could reduce the global real Gross Domestic Product (GDP) by almost seven per cent in the long-term.
The WTO DG added that it was important for WTO member countries to collectively address the situation to preserve the transparency of the international trading system.
“Of particular concern is the potential fragmentation of global trade along geopolitical lines.
“A division of the global economy into two blocs could lead to a long-term reduction in global real GDP by nearly seven per cent.
“Moreover, trade diversion remains an immediate and pressing threat, one that requires a coordinated global response.
“We urge all WTO members to address this challenge through cooperation and dialogue.
“It is critical for the global community to work together to preserve the openness of the international trading system.
“WTO members have agency to protect the open, rules-based trading system. The WTO serves as a vital platform for dialogue. Resolving these issues within a cooperative framework is essential,” she noted.
US tariffs: IMF, WTO warn of risk to global economy
Meanwhile, TheRadar earlier reported that the International Monetary Fund (IMF) and the World Trade Organisation (WTO) warned of the global economic risk of the recent tariffs imposed on countries by the United States of America (USA).
The warning was contained in separate statements released by the global bodies on Thursday, April 3, in response to the Tuesday announcement of sweeping tariffs on countries by US President, Donald Trump.
