Thursday, April 10, 2025 - U.S. President Donald Trump raised tariffs on China to 125 percent on Wednesday as the world’s two largest economies fought over retaliatory levies.
The World Trade Organization chief said the US-China tariff
war could reduce trade in goods between the two economic giants by 80 percent,
pulling down the rest of the world economy.
“The
escalating trade tensions between the United States and China pose a
significant risk of a sharp contraction in bilateral trade. Our preliminary
projections suggest that merchandise trade between these two economies could
decrease by as much as 80 percent,” WTO director general Ngozi Okonjo-Iweala
said in a statement.
She said the United States and China accounted for three
percent of world trade and warned that the conflict could “severely damage the
global economic outlook”.
Even as he slapped further tariffs on China, Trump paused
higher tariffs on the rest of the world for 90 days after dozens of countries
reached out for negotiations.
Okonjo-Iweala warned that the world economy risked breaking
into two blocs, one centred around the United States and the other China.
“Of
particular concern is the potential fragmentation of global trade along
geopolitical lines. A division of the global economy into two blocs could lead
to a long-term reduction in global real GDP by nearly seven percent,” she said.
She urged all WTO members “to address this challenge through
cooperation and dialogue”.
“It is
critical for the global community to work together to preserve the openness of
the international trading system,” said Okonjo-Iweala. “WTO members have agency
to protect the open, rules-based trading system. The WTO serves as a vital
platform for dialogue. Resolving these issues within a cooperative framework is
essential.”
Hours earlier, Trump ramped up duties on Chinese goods to
104 percent, only to hike them further when China retaliated by raising tariffs
on US imports to 84 percent.
In a social media post announcing the moves, Trump said
China had been singled out for special treatment because of “the lack of
respect that China has shown to the World’s Markets”.
US stock markets had slumped around 10 percent in the past week as trade tensions grew, but they surged after Trump announced his pause.
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