By Paul Dada
The World Trade Organisation (WTO) says its secretariat is closely monitoring and analysing the developments around the new tariffs being imposed on US trading partners around the world by the Donald Trump administration.
The April 2 announcement of the new measures by the US government has sent jitters around the world. The nations are already coming up with countermeasures against the new policy by Trump.
WTO, in a statement by its Director-General, Dr. Ngozi Okonjo-Iweala, says many of its members are concerned about the impact of the measures by the US Government on their economies.
“The WTO Secretariat is closely monitoring and analysing the measures announced by the United States on April 2, 2025. 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.
“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.
“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,” Okonjo-Iweala says.
She, however, assures that despite the measures by the US, the vast majority of the global trade still flows under the WTO’s Most-Favored-Nation (MFN) terms.
She says, “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%, down from around 80% at the beginning of the year. WTO members must stand together to safeguard these gains.
‘Trade measures of this magnitude have the potential to create significant trade diversion effects. I call on Members 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 utilize this forum to engage constructively and seek cooperative solutions.”
