Tariff War to Cause Disastrous Effect on Global Trade: WTO Chief

April 17, 2025

Despite the 90-day pause, the enduring uncertainty threatens to act as a brake on global growth, with severe negative consequences for the world, particularly for the most vulnerable economies, WTO Director-General Ngozi Okonjo-Iweala stated in a press release.

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Despite the 90-day pause, the enduring uncertainty threatens to act as a brake on global growth, with severe negative consequences for the world, particularly for the most vulnerable economies, WTO Director-General Ngozi Okonjo-Iweala stated in a press release.

The World Trade Body further said that its simulations showed that trade policy uncertainty has a significant dampening effect on trade flows, reducing exports and weakening economic activity. Tariffs are a policy lever with wide-ranging and often unintended consequences. In a world of growing trade tensions, a clear-eyed view of those trade-offs was more important than ever, the statement said.

The World Trade Organisation says the volume of trade in goods worldwide is likely to decrease by 0.2% this year due to U.S. President Donald Trump’s shifting tariff policies and the standoff with China. The trade body maintained that it would take a more severe hit if Trump carried through on his toughest “reciprocal” tariffs.

The decline in trade will be particularly steep in North America, even without the steepest tariffs, the WTO said, with exports this year expected to fall by 12.6% and imports by 9.6%.

The WTO based its report on the tariff situation as of Monday. Initially, 2025 and 2026 were expected to have continued expansion of world trade. But Trump’s trade war compelled WTO economists to downgrade their forecast.

Trade in goods worldwide would slump by 1.5% if Trump follows through on his stiffest tariffs on most nations, due to the uncertainty unsettling businesses.

Trump suspended the toughest set of tariffs for 90 days earlier this month. Meanwhile, he is increasing taxes on Chinese imports to 145% and engaging in a lengthy back-and-forth with Canada and Mexico about tariffs on their goods.