By Ayomide Otitoju
The Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, has warned that sweeping new tariffs announced by U.S. President Donald Trump could cause a 1% contraction in global merchandise trade volumes this year.
Speaking on Thursday, Okonjo-Iweala said the tariffs—unveiled a day earlier by Trump—could have “substantial implications for global trade and economic growth prospects.” The measures include a blanket 10% import duty on all nations and significantly higher levies on dozens of targeted countries, including major U.S. trade partners China and the European Union. The new round of tariffs adds to those imposed since Trump’s return to office in January.
“While the situation is rapidly evolving, our initial estimates suggest that these measures, coupled with those introduced earlier this year, could lead to an overall contraction of around 1 percent in global merchandise trade volumes,” Okonjo-Iweala said in a statement.
She noted that the projected contraction marks a nearly four-percentage-point drop from the WTO’s earlier trade growth forecast.
Expressing concern over the potential for a broader trade conflict, Okonjo-Iweala called on WTO members to respond responsibly. “I’m deeply concerned about this decline and the potential for escalation into a tariff war with a cycle of retaliatory measures that lead to further declines in trade,” she warned.
Despite the new restrictions, the WTO chief noted that the majority of global trade still operates under the organization’s Most-Favoured-Nation (MFN) framework, which prohibits discriminatory practices between trading partners. However, she cautioned that the share of global trade covered under MFN terms has fallen to 74% from around 80% at the beginning of the year.
Okonjo-Iweala urged WTO members to protect the multilateral trading system and the principles that underpin it. “The WTO was established to serve precisely in moments like this—as a platform for dialogue, to prevent trade conflicts from escalating, and to support an open and predictable trading environment,” she stated.
