WTO Warns Tariff War May Slash US-China Trade by 80%

Trump Hikes Tariffs on Chinese Goods to 125% Amid Rising Tensions

In a dramatic move that escalates the ongoing trade dispute, U.S. President Donald Trump on Wednesday raised tariffs on Chinese goods to 125%, heightening concerns about the global economic impact of the U.S.-China standoff. The tariff hike signals a new level of economic confrontation between the world’s two largest economies.

WTO Chief Warns of Major Decline in U.S.-China Trade

Responding to the news, Ngozi Okonjo-Iweala, Director-General of the World Trade Organization (WTO), issued a stern warning.

“The escalating trade tensions between the United States and China pose a significant risk of a sharp contraction in bilateral trade,” she said.
Preliminary WTO projections suggest that merchandise trade between the two superpowers could plummet by up to 80%, a figure that would send shockwaves through the global economy.

This development has drawn attention across African news platforms due to its potential implications for developing economies that rely on trade with both nations.

Global Economic Outlook at Risk

Okonjo-Iweala emphasized the larger threat to the international economy, pointing out that the U.S. and China together account for about three percent of total world trade.

“The conflict could severely damage the global economic outlook,” she warned.

She also noted the growing risk of global economic fragmentation, with the world potentially splitting into two dominant trade blocs—one aligned with the U.S. and the other with China.

“Such a division could result in a long-term reduction in global real GDP by nearly 7%,” she added.

Calls for Global Cooperation and Dialogue

Urging member nations to prevent further breakdowns in trade relations, the WTO Director-General called for unity:

“It is critical for the global community to work together to preserve the openness of the international trading system. The WTO remains a key platform for dialogue and resolving these issues within a cooperative framework.”

Her message resonates strongly with policymakers and economists in African news circles, who view multilateralism as key to protecting smaller economies.

Trump Temporarily Pauses Tariffs on Other Nations

Interestingly, while targeting China with increased tariffs, Trump simultaneously announced a 90-day pause on higher tariffs for other nations, following diplomatic outreach from several countries seeking negotiation.

Tit-for-Tat Retaliation from China

Just hours before Trump’s final announcement, the U.S. had already raised duties to 104%, prompting China to retaliate by increasing tariffs on U.S. imports to 84%. This back-and-forth exchange further strained already fragile relations.

Markets React Sharply to Trade Developments

Amid the uncertainty, U.S. stock markets initially slumped by around 10% over the past week. However, they rebounded slightly following Trump’s announcement of the temporary global tariff pause. In a social media post, the President justified the moves by accusing China of showing “a lack of respect to the World’s Markets.”

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