The Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, has expressed concern over new tariffs introduced by the United States, warning that these, combined with earlier tariffs imposed at the start of the year, could lead to a contraction of about 1% in global merchandise trade volumes in 2025.
"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," Okonjo-Iweala said in a statement.
She also highlighted that these tariffs could cause significant trade diversion effects, noting that the WTO now administers 74% of global trade, a decrease from around 80% at the start of the year due to the introduction of new tariffs.
World leaders have warned of the potential negative economic consequences of the tariffs. European Commission President Ursula Von Der Leyen called the announcement of universal tariffs, including those on the European Union, “a major blow to the world economy.” Earlier in the day, Okonjo-Iweala addressed WTO member states in a letter seen by Reuters, acknowledging the numerous inquiries received about the tariffs. "Many of you have been in touch about the U.S. announcement on tariffs, asking for the Secretariat to provide an economic analysis of the impact of these tariffs and any potential reaction on your trade," she wrote. Observers suggest that the U.S.'s determination to persist with the tariffs could undermine the Geneva-based WTO and its role in promoting free trade.
