WTO's Okonjo-Iweala warns US-China trade war could cut bilateral trade by 80%

The Director-General of the World Trade Organisation (WTO), Ngozi Okonjo-Iweala, has warned that the ongoing tariff war between the United States and China could slash trade in goods between the two countries by as much as 80 percent, with severe consequences for the global economy.

Okonjo-Iweala issued the warning in a statement on Wednesday, April 9, as US President Donald Trump raised tariffs on Chinese imports to 125 percent amid intensifying trade tensions between the world’s two largest economies.

“The escalating trade tensions between the United States and China pose a significant risk of a sharp contraction in bilateral trade. Our preliminary projections suggest that merchandise trade between these two economies could decrease by as much as 80 percent,” she said.

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The WTO chief also cautioned that the conflict could fragment the global economy, creating two opposing trade blocs—one centred around the US and the other around China.

She warned that such a division could lead to a long-term decline in global real GDP by nearly seven percent.

Trump, despite imposing new tariffs on China, temporarily paused further tariff increases on other countries for 90 days following diplomatic interventions.

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However, he later raised duties on Chinese goods to 104 percent after Beijing retaliated by increasing tariffs on US imports to 84 percent.

Calling for urgent dialogue, Okonjo-Iweala urged WTO member states to prioritise cooperation to prevent further economic disruption.

Meanwhile, Trump defended the move on social media, stating that China had been subjected to special tariffs due to its lack of respect for global markets.