World Trade Organization (WTO) Director-General Dr. Ngozi Okonjo-Iweala has issued a grave warning over the escalating tariff war between the United States and China.
The respected economist has called the tariff brouhaha between Trump and China a “dangerous spiral” that could push the global economy toward a self-inflicted disaster.
In a strongly worded statement delivered on April 9, Okonjo-Iweala cautioned that continued tit-for-tat tariff hikes between the world’s two largest economies could result in economic losses totaling $466 billion worldwide.
She stated that the fallout is a bilateral concern and a “global emergency” threatening supply chains and economic stability across continents.
“The Worst Self-Inflicted Wound”
“The escalating trade tensions between the United States and China pose a significant risk of a sharp contraction in bilateral trade,” said Okonjo-Iweala. “This is not just a bilateral issue; it’s a global emergency.”
According to WTO projections, merchandise trade between the U.S. and China could plummet by as much as 80% if current trends continue.
With U.S. tariffs jumping from 124% to 145% and China retaliating with 125% duties on American goods, key sectors face shutdowns as cross-border trade grinds to a halt.
The WTO head warned that further escalation could fragment global trade into geopolitical blocs, slashing global GDP by nearly 7% in the long run—a blow that would be especially devastating for developing nations dependent on U.S.-China commerce.
Urging Urgent Global Dialogue
Okonjo-Iweala called on all WTO members to act swiftly to avoid “the worst self-inflicted wound in modern economic history.” She urged countries to recommit to the rules-based global trading system and use the WTO as a platform for cooperative dialogue.
“If this trade war continues, it could disrupt global supply chains, inflate prices, and stifle economic recovery growth worldwide,” she added, highlighting that a coordinated global response is essential to stabilize the economic outlook.
Key Points:
- U.S.-China trade war could cost global economy $466 billion.
- Tariff hikes have reached 145% from the U.S. and 125% from China.
- WTO projects an 80% drop in U.S.-China merchandise trade.
- Global GDP could fall by nearly 7% if trade divides along geopolitical lines.
