The World Trade Organization, WTO, has slashed its forecast for global merchandise trade from solid growth to a decline.
US President Donald Trump’s trade war with China has also reportedly intensified with tit-for-tat exchanges pushing levies on each other’s imports beyond 100%.
According to the WTO, further US tariffs and spillover effects could lead to the heaviest slump since the height of the COVID pandemic.
WTO Director General, Ngozi Okonjo-Iweala expressed these concerns while speaking with reporters in Geneva on Wednesday.
The global trade body said it expected trade in goods to fall by 0.2% this year, down from its expectation in October of 3.0% expansion, adding that its new estimate was based on measures in place at the start of this week.
“I’m very concerned, the contraction in global merchandise trade growth is of big concern,” Okonjo-Iweala said.
“If we have contraction in global merchandise the concern is spill over into broad GDP growth. We’ve seen that the trade concerns can have negative spill overs into financial markets, into other broader areas of the economy,” Okonjo-Iweala added.
The head of the WTO said her greatest fear was that the economies of China and the US were decoupling from one another.
