The Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, has voiced concerns over the new tariffs imposed by the United States, warning that these, along with earlier tariffs introduced earlier this year, could result in a 1% contraction in global merchandise trade volumes in 2025.
“I’m deeply concerned about this decline and the potential for it to escalate into a tariff war, with retaliatory measures that could further depress trade,” Okonjo-Iweala stated in a recent comment.
She also noted that the new tariffs could lead to significant trade diversion effects, highlighting that the WTO now oversees 74% of global trade, down from around 80% earlier this year due to the introduction of these tariffs.
World leaders have expressed concern about the potential negative economic impact of the tariffs. European Commission President Ursula von der Leyen described the announcement of universal tariffs, including those targeting the European Union, as “a major blow to the world economy.”
Earlier, Okonjo-Iweala addressed WTO member states in a letter, seen by Reuters, acknowledging the numerous inquiries the organization had received regarding the tariffs. “Many of you have reached out about the U.S. tariff announcement, requesting the Secretariat to provide an economic analysis of its impact and any potential reactions on your trade,” she wrote.
Observers suggest that the U.S.’s continued imposition of tariffs could undermine the Geneva-based WTO’s role in promoting free trade.
