Following President Donald Trump’s announcement of “reciprocal tariffs” affecting nearly all goods imported into the United States (see President Trump’s tariffs could lead to a global trade war), a number of World Trade Organization (WTO) members have contacted the global organisation asking about its potential impact on their economies and the global trading system.
WTO Director-General, Dr Ngozi Okonjo-Iweala, has said 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% in global merchandise trade volumes this year, representing a downward revision of nearly 4% from previous projections.
However, she also highlighted that the great majority of global trade still flows under the WTO's Most-Favoured-Nation (MFN) terms.
“Our estimates now indicate that this share currently stands at 74%, down from around 80% at the beginning of the year,” she added. “WTO members must stand together to safeguard these gains.”
Dr Okonjo-Iweala emphasised the role of the WTO in preventing trade conflicts from escalating and supporting an open and predictable trading environment. “I encourage members to utilise this forum to engage constructively and seek co-operative solutions,” she concluded.
President Trump has repeatedly expressed his dislike of the WTO, so he would probably not have been happy with its reaction to the turmoil caused by his tariffs.
