LMSINT MEDIA reports that the Director-General of the World Trade Organization (WTO), Dr. Ngozi Okonjo-Iweala, has raised a serious red flag about the ongoing tariff standoff between the United States and China. According to her, the intensifying trade war could potentially reduce goods trade between the two nations by up to 80%, dealing a critical blow to the global economy.
In a public statement released on Wednesday, Okonjo-Iweala explained that the situation poses a “significant threat to global trade stability.” This concern follows the recent decision by U.S. President Donald Trump to sharply increase tariffs on Chinese goods to a staggering 125%—a retaliatory move amid escalating tensions.
“Preliminary forecasts suggest that merchandise trade between the U.S. and China could drop by as much as 80%,” said the WTO Director-General.
“This could severely impact the global economic outlook, considering the combined weight of both countries in international commerce.”
Together, the U.S. and China account for about 3% of global trade volume, making their cooperation vital for global economic health.
Tariff Escalation and Global Fallout
Earlier the same day, Trump raised tariffs on Chinese products to 104%, only to push them even higher after China responded with its own hike—boosting tariffs on American imports to 84%.
The U.S. president defended the move via a social media announcement, claiming that China has consistently disrespected global trade norms. He temporarily suspended plans for broader tariff increases on other countries for 90 days, pending negotiations.
WTO Chief Warns of Global Trade Fragmentation
Okonjo-Iweala cautioned against the formation of two separate economic power blocs—one led by the United States, and the other by China. She noted that such a split could reduce global real GDP by nearly 7% in the long term.
“The fragmentation of international trade along geopolitical lines could bring lasting damage to global cooperation,” she emphasized.
“All WTO member states must work toward peaceful resolutions through dialogue and collective action.”
A Call for Cooperation Over Confrontation
As trade tensions deepen, the WTO urges both nations to de-escalate the conflict through mutual dialogue and diplomatic channels, rather than punitive tariffs.
To learn more about how international trade affects the global economy, check out our overview of global trade systems
For more insights from the WTO, visit the official WTO news updates.
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