WTO warns of global trade impact, economic growth prospects from US tariffs

The World Trade Organisation (WTO) has said the measures announced by the United States will have substantial implications for world trade and economic growth prospects.

WTO also noted that the new policy could lead to an overall contraction of around one per cent in global merchandise trade volumes in 2025.

This was according to a statement by Director-General of the WTO, Mrs. Ngozi Okonjo-Iweala following the US decision to impose tariffs on nearly 60 countries.

Since taking office, President Donald Trump has announced a growing list of tariffs on specific countries and commodities — a move aimed at protecting American interests. However, their rollout has been marred by delays and reversals, and the situation continues to evolve.

Trump on Wednesday enacted sweeping new tariffs in a move that could escalate trade tensions globally at what he tagged “liberation day”.

Trump said the U.S. will implement “reciprocal tariffs” on all countries of “approximately half” of what they charge us.

Among the countries slammed with reciprocal tariff is Nigeria. Under the tariff plan, Nigerian exports will be charged 14 per cent tariff as against the 27 per cent charged by the Federal Government.

In a statement, Okonjo-Iweala noted that the WTO Secretariat is closely monitoring and analysing measures announced by the United States on April 2.

“Many members have reached out to us and we are actively engaging with them in response to their questions about the potential impact on their economies and the global trading system,” she said, adding that 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 per cent in global merchandise trade volumes this year, representing a downward revision of nearly four percentage points from previous projections,” she said.

The director-general also said he is 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.

“It is important to remember that, despite these new measures, the vast 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 per cent, down from around 80 per cent at the beginning of the year. WTO members must stand together to safeguard these gains,” she said.