Geneva | April 3, 2025 — The Director-General of the World Trade Organization, Dr. Ngozi Okonjo-Iweala, has raised the alarm over the economic ripple effects triggered by new trade measures announced by the United States on April 2.
According to her, the WTO is closely watching the developments and actively engaging with member states who have expressed concern about how the U.S. actions could disrupt their economies and the broader global trading system.
Preliminary analysis from the WTO Secretariat suggests a troubling outlook: global merchandise trade volumes could shrink by around 1% in 2025. This marks a steep downward adjustment of nearly four percentage points from earlier forecasts, driven in large part by the cumulative effect of new tariffs rolled out since the beginning of the year.
Dr. Okonjo-Iweala warned that the current trajectory risks sparking a damaging tariff spiral, as nations may retaliate in kind. Such a cycle, she said, could further depress trade volumes and weaken global economic growth.
Despite the rising trade tensions, she pointed out that a significant share—currently around 74%—of world trade still operates under the WTO’s Most-Favored-Nation (MFN) terms. However, this marks a decline from roughly 80% just months ago, signaling a shift toward more fragmented trade practices.
The WTO chief urged member states to manage the situation responsibly to avoid a wider fallout. She also called on governments to make use of the WTO’s platform to resolve disputes through dialogue rather than confrontation.
She described this moment as precisely the kind of challenge the WTO was created to handle—offering a space for negotiation, preventing escalation, and ensuring a rules-based global trading order.
