The Director-General of the World Trade Organization (WTO), Dr. Ngozi Okonjo Iweala, has warned that the United States’ declaration of tariffs on several economies on April 2, 2025, could lead to a 1% contraction in global merchandise trade volumes this year.
She disclosed this in a recent statement regarding the latest tariffs announced by American President Donald Trump. Dr. Iweala said the WTO is already responding to enquiries from member countries of the organization on the implications of the tariffs.
According to her, “The recent announcements will have substantial implications for global trade and economic growth prospects. While the situation is rapidly evolving, our 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 four percentage points from previous projections.”
The Nigerian-born DG of the WTO expressed concerns about the potential decline in global merchandise trade volumes and the imminent escalation into a tariff war, with a cycle of retaliatory measures that could lead to further a decline in trade.
Assessing the developments following the recent U.S. tariff announcements, she added, “It is essential to remember that, despite these new measures, the majority of global trade still flows under the WTO’s Most-Favored-Nation (MFN) terms.” Our estimates now indicate that this share currently stands at 74%, down from around 80% at the beginning of the year. WTO members must stand together to safeguard these gains.”
The WTO Head noted that the current trade measures taken by the United States have the potential to create significant trade diversion effects. She called on Member Countries to manage the resulting pressures responsibly to prevent trade tensions from proliferating.
“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. I encourage Members to utilise this forum to engage constructively and seek cooperative solutions,” Dr. Ngozi Okonjo-Iweala added.
