The Director-General of the World Trade Organization, Ngozi Okonjo-Iweala, has warned that recent tariffs imposed by the United States could significantly affect global trade and economic growth.

On April 2, US President Donald Trump announced global tariffs on all imports, including a 14 per cent tariff on goods from Nigeria.

In a statement issued on Thursday, Okonjo-Iweala emphasised that the WTO is closely monitoring the situation and engaging with member countries about the potential economic impacts.

She noted that many WTO members have expressed concern, and the organization is working to address these concerns.

Okonjo-Iweala cautioned that these new tariffs, in combination with other trade measures introduced earlier this year, could result in a global trade contraction of about 1 percent, marking a downward revision of nearly four percentage points from previous estimates.

“The recent announcements will have substantial implications for global trade and economic growth prospects.

“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, representing a downward revision of nearly four percentage points from previous projections,” the economist said.

She also highlighted the risk of escalating trade tensions, which could lead to retaliatory tariffs and further reductions in trade.

Despite the recent measures, Okonjo-Iweala reminded that the majority of global trade still operates under the WTO’s Most-Favored-Nation terms, although this share has declined from 80 percent at the start of the year to 74 per cent.

She called on WTO members to collaborate and manage the situation responsibly to avoid worsening trade conflicts.

“It is important to remember that, despite these new measures, the vast majority of global trade still flows under the WTO’s Most-Favored-Nation terms.

“Our estimates now indicate that this share currently stands at 74 percent, down from around 80 percent at the beginning of the year. WTO members must stand together to safeguard these gains,” she said.

Okonjo-Iweala added, “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,” Okonjo-Iweala said.



https://punchng.com/wto-warns-us-tariffs-may-shrink-global-trade/