World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala stated on the 9th that the tariff war between the United States and China could lead to an 80% reduction in trade of goods between these two major economies, thereby dragging down the economies of other regions in the world.
In a statement, she said: “The escalating tensions in U.S.-China trade pose a significant risk of sharply reducing bilateral trade. Our preliminary forecast suggests that merchandise trade between these two major economies could decline by as much as 80%.”
She noted that the combined U.S.-China trade accounts for 3% of the world's total trade volume, and the conflict could “seriously damage the global economic outlook.”
She warned that the global economy could split into two major groups, one centered around the United States and the other around China.
She stated: “What is particularly concerning is that global trade could fragment due to geopolitical factors. A division of the world economy into two camps could lead to a long-term decline of nearly 7% in global real Gross Domestic Product (GDP).”
She urged all WTO members to “address this challenge through cooperation and dialogue.”
Iweala remarked: “It is crucial for the international community to work together to maintain an open international trade system.”