The Director-General of the World Trade Organization (WTO), Dr. Ngozi Okonjo-Iweala, has issued a stern warning about the growing global economic risks posed by the ongoing tariff war initiated by the United States. The trade conflict, which includes recent tariffs announced on April 2, is already causing major disruptions in international trade, she stated, calling on world leaders, particularly U.S. President Donald Trump, to halt the escalating trade measures before they further damage the global economy.
In a press statement personally released by Dr. Okonjo-Iweala, the WTO chief voiced deep concern over the negative impact of these tariff measures. She emphasized that the WTO Secretariat is actively monitoring the developments, staying in close communication with member states to assess the broader consequences of the trade dispute.
“Many members have reached out to us, and we are actively engaging with them in response to their questions about the potential impact on their economies and the global trading system,” Okonjo-Iweala said. Her warning comes at a time when the international community is grappling with the consequences of growing protectionist policies, particularly the trade actions taken by the United States against key global players like China, Canada, and the European Union.
The WTO chief highlighted that, according to early estimates by the organization, the new wave of tariffs could lead to a contraction of 1% in global merchandise trade volumes in 2025. This marks a significant downward revision of nearly four percentage points from previous projections, indicating a severe slowdown in global trade.
“This decline is alarming,” Okonjo-Iweala stated. “There is a real risk of a full-blown tariff war, driven by cycles of retaliatory measures that could further depress global trade.” She warned that the global economy could face even more setbacks if nations continue to implement protectionist measures that limit trade between countries, particularly in the midst of a recovery from the COVID-19 pandemic.
One of the key concerns raised by Okonjo-Iweala is the decreasing share of international trade conducted under the World Trade Organization’s Most-Favored-Nation (MFN) terms. According to her, about 74% of global trade now operates under MFN rules, a notable decline from the 80% at the start of the year. This decline suggests a worrying shift toward protectionism, a trend that undermines the principles of free trade and could have long-lasting effects on the global economy.
“WTO members must stand together to safeguard these gains,” Okonjo-Iweala urged, stressing that the organization’s role as a platform for dialogue and dispute resolution is more important than ever. She called on WTO members to work collaboratively to manage the pressures resulting from these trade measures and prevent tensions from escalating into an all-out trade war.
She also highlighted that the WTO was specifically established to handle such challenges. “The WTO was created to serve precisely in moments like this,” Okonjo-Iweala explained. “It is a platform for dialogue to prevent trade conflicts from escalating and to support an open and predictable trading environment.”
Dr. Okonjo-Iweala’s call for cooperation and responsible management of trade measures comes amid rising tensions between the U.S. and several major economies. In particular, China has responded to the latest U.S. tariffs by imposing a 34% tariff on all American goods in retaliation. The Chinese government stated that the U.S. actions violate international trade norms and warned that the escalating tariffs could destabilize the global trading system.
The trade conflict has intensified since U.S. President Donald Trump first introduced the tariffs, citing national security concerns and the need to address trade imbalances. The U.S. has targeted a wide range of goods from countries like China, Canada, and the EU, raising fears of a global trade war that could spread beyond these major economies.
The ongoing trade war is already taking its toll on the global economy, with economists predicting that continued tariffs will lead to higher prices for consumers, disruptions in global supply chains, and slower economic growth. The WTO’s most recent estimates suggest that global trade volumes could shrink significantly in the next few years if these measures continue.
The potential effects of the tariff war are particularly concerning for developing nations, which rely heavily on international trade to fuel their economies. Many of these countries could see a reduction in export opportunities, a situation that could exacerbate existing economic challenges and undermine efforts to reduce poverty and promote economic growth.
As the world watches anxiously, trade diplomats and economists warn that the outcome of this trade dispute could shape the global economic landscape for years to come. The growing protectionism, coupled with the unpredictable nature of the tariffs, has left many countries uncertain about the future of international trade.
Okonjo-Iweala’s call for cooperation within the WTO is an attempt to prevent the situation from deteriorating further. She reminded member countries that the WTO’s dispute settlement mechanism was designed to address trade conflicts in a peaceful manner, without the need for punitive tariffs or retaliatory measures.
“The WTO is here to ensure that trade remains an engine for growth and prosperity for all nations,” Okonjo-Iweala said. She further encouraged countries to engage in constructive dialogue and seek out cooperative solutions that benefit the global economy, rather than escalating tensions with unilateral actions that could destabilize the trading system.
Dr. Okonjo-Iweala’s strong warning is not just a reflection of the WTO’s concern over the trade war, but also a call for international solidarity. She pointed out that the principles of free and fair trade have benefited economies across the world, particularly in terms of increasing access to markets, boosting productivity, and improving living standards.
The WTO Director-General concluded by reiterating the importance of maintaining open channels of communication among trading nations. She urged world leaders to carefully consider the long-term consequences of their trade actions, noting that the impact of current decisions will be felt by future generations.
In light of the escalating tariff war and growing global tensions, the WTO’s role in facilitating dialogue and resolving disputes has never been more critical. As the global economy faces uncertainty, it is hoped that Dr. Okonjo-Iweala’s message will encourage world leaders to come together, manage trade tensions responsibly, and prioritize global economic stability over protectionism.
The outcome of the current trade conflict will undoubtedly have significant consequences for the global economy, and the coming months will be crucial in determining whether nations can find a way to reverse the trend toward protectionism and restore stability to the international trading system.
