^{Director-General of World Trade Organisation (WTO), Ngozi Okonjo-Iweala | The Whistler Newspaper}

Geneva, April 4, 2025 — The World Trade Organization (WTO) has sounded a serious alarm, forecasting a 1% contraction in global merchandise trade for 2025—marking a sharp deviation from earlier growth projections. The culprit? A rapidly escalating tariff war, led by sweeping new import duties announced by former U.S. President Donald Trump earlier this week.

WTO Director-General Dr. Ngozi Okonjo-Iweala emphasized in an official statement that the Geneva-based trade body is “closely tracking” the situation after the U.S. unilaterally imposed a baseline 10% tariff on most imports, with significantly steeper levies—54% on Chinese goods, 24% on Japanese imports, and 20% on EU products—triggering widespread concern.

“Our early projections now suggest a 1% drop in global merchandise trade volume, a drastic downward revision of nearly 4 percentage points from our January 2025 outlook,” Okonjo-Iweala stated.

Global Trade at Risk: Key Figures and Revised Projections

Prior to these developments, the WTO had projected a 3% growth in global trade for the year. But with new protectionist policies surfacing not only in the U.S. but also in retaliation from China, the EU, and Japan, the global trade landscape is becoming increasingly volatile.

• Previous Forecast (Jan 2025): +3.8% global merchandise trade growth
• Revised Forecast (Apr 2025): –1.0% contraction
• Change: Approx. 4.8 percentage points drop

The WTO's forecast reflects early-stage disruptions observed in global shipping routes, port activities, and order volumes across manufacturing hubs. Asian economies are particularly vulnerable, given their export-heavy dependence on U.S. demand.

Cycle of Retaliation: A Looming Trade War

Dr. Okonjo-Iweala warned of a dangerous "cycle of retaliation", where one nation’s tariffs prompt countermeasures, resulting in reduced trade flows and economic inefficiencies.

“I’m deeply concerned about a return to a tariff war reminiscent of the 1930s, which could lead to prolonged stagnation in global commerce,” she cautioned.

Reports from Bloomberg and Reuters confirm that China is already considering a counter-tariff package targeting $100 billion worth of U.S. agricultural and tech exports, while the European Commission is convening an emergency session next week to assess retaliatory options.

WTO Trade Framework Strained but Still Functional

Despite rising protectionism, Okonjo-Iweala highlighted that 74% of international trade still operates under the WTO’s Most-Favored-Nation (MFN) rules, a drop from 80% at the start of 2025.

“This significant decline is a warning sign. WTO members must protect the foundational principles of fair and open trade,” she urged.

She further emphasized that the WTO remains a critical forum for conflict resolution and coordination, noting that several member nations have already engaged in high-level consultations to de-escalate tensions.

Economic Fallout Already Underway

The early economic tremors are already being felt:

• U.S. Markets: Dow Jones plunged over 1,200 points, with Nasdaq and S&P 500 down 6% and 4.8%, respectively.
• Asian Markets: Nikkei dropped 4.2%, Hang Seng fell 5.1%, and the Shanghai Composite lost 3.8%.
• European Markets: The DAX and FTSE both slid by more than 3.5% on Thursday.

Experts Urge Immediate Dialogue

Trade economists have echoed the WTO’s warnings, urging nations to return to multilateral dialogue.

“We’re looking at a potential $1.3 trillion hit to global GDP if these tariffs remain in place through Q4,” said Dr. Emily Novak, senior economist at the Peterson Institute for International Economics.

“Tariffs of this scale will distort supply chains, increase consumer prices, and deepen inflation in already vulnerable regions like Latin America and Southeast Asia.”

Call for Cooperation Amid Chaos

In closing remarks, Okonjo-Iweala reiterated the WTO’s role in stabilizing global trade:

“The WTO was built for times like these. I urge all members to use this platform constructively—not to escalate tensions, but to rebuild confidence and cooperation in the international trading system.”

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