The Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, has cautioned the United States and China against escalating their trade conflict, warning that the deepening standoff between both economic giants could have far-reaching implications for global growth and stability.
Speaking at an international economic forum, Okonjo-Iweala said that a sustained breakdown in trade relations between Washington and Beijing could cost the world up to 7 percent of its total economic output (GDP). She noted that while the slowdown would affect all nations, developing economies would be hit the hardest, with some projected to experience double-digit declines in income and welfare.
“The growing divide between the world’s two largest economies is already reshaping trade flows, disrupting supply chains, and distorting investment patterns,” the WTO chief warned. “When the U.S. and China are at odds, the entire global trading system feels the shockwaves. What follows is slower trade, higher costs, and reduced cooperation—at a time when global unity is critical to address shared challenges like climate change, digital transformation, and inclusive growth.”
Okonjo-Iweala explained that a prolonged “economic decoupling” — in which both countries attempt to sever economic ties — would fragment the world economy into rival blocs, creating inefficiencies and undermining decades of progress achieved through globalization. She added that such fragmentation could trigger inflationary pressures, job losses, and reduced innovation, particularly in sectors reliant on cross-border collaboration.
However, she emphasized that the crisis also presents an opportunity for reflection and reform. According to her, countries must seize this moment to modernize the global trading system, strengthen the WTO’s role, and ensure that trade policies promote fairness and inclusiveness—especially for small and vulnerable economies that depend heavily on exports.
“The global trading system was created to prevent this kind of economic fragmentation,” Okonjo-Iweala said. “Instead of retreating into protectionism, nations should come together to rebuild trust, strengthen dispute settlement mechanisms, and make trade more sustainable, resilient, and equitable.”
Her remarks come amid renewed tensions between the United States and China over tariffs, technology, and market access. Washington has repeatedly accused Beijing of unfair trade practices and intellectual property theft, while China contends that American restrictions are designed to curb its rise as a global economic power.
Analysts have warned that failure to resolve the standoff could disrupt global supply chains spanning electronics, agriculture, and manufacturing, with ripple effects on prices, investment, and employment worldwide.
Okonjo-Iweala reiterated that cooperation, not confrontation, remains the only viable path to securing long-term stability and prosperity. “No nation can thrive in isolation,” she said. “A stronger, reformed multilateral trading system is the surest foundation for shared global progress.”
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Okonjo-Iweala Warns U.S. and China: Trade Tensions Could Derail Global Growth
The Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, has cautioned the United States and China against escalating their trade conflict, warning that
