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Summary
WTO Director-General Dr Ngozi Okonjo-Iweala has warned that the new U.S. trade measures could shrink global merchandise trade by 1% in 2025. She urged WTO members to avoid a retaliatory spiral that could trigger a broader tariff war and called for constructive engagement to protect the global trading system.
The Director-General of the World Trade Organization (WTO), Dr Ngozi Okonjo-Iweala, has expressed deep concern over the United States’ newly announced trade measures, warning that the global economy could suffer a significant setback if tensions escalate into a full-blown tariff war.
In a statement released on Apr. 3, 2025, Ngozi said the WTO Secretariat has been closely monitoring and analysing the U.S. actions announced a day earlier. She confirmed that several WTO members have contacted the organisation with urgent questions about the measures’ implications for their economies and global trade.
“Our initial estimates suggest that these measures, coupled with those introduced since the beginning of the year, could lead to an overall contraction of around 1% in global merchandise trade volumes this year,” said Ngozi. “This represents a downward revision of nearly four percentage points from previous projections.”
She cautioned that a tariff war marked by retaliatory measures could deepen the decline in global trade and stall economic recovery in vulnerable economies. She noted that although the global trading system remains largely intact, recent developments are threatening its stability.
According to Ngozi, 74% of global trade currently flows under the WTO’s Most-Favored-Nation (MFN) terms, down from about 80% at the beginning of the year. She called on WTO members to protect these gains and avoid measures that could lead to further fragmentation of the trading system.
“Trade measures of this magnitude have the potential to create significant trade diversion effects,” she said. “I call on Members to manage the resulting pressures responsibly to prevent trade tensions from proliferating.”
Ngozi reminded members of the WTO’s founding purpose — to serve as a forum for dialogue and to prevent trade disputes from spiralling out of control. She urged members to use the organisation’s mechanisms to engage constructively and pursue cooperative solutions in the face of rising uncertainty.
“The WTO was established to serve precisely in moments like this,” she said. “I encourage members to utilise this forum to engage constructively and seek cooperative solutions.”
