US President Donald Trump has announced a 90-day pause on tariffs effective immediately.
The US president, in a post on his Truth Social platform, wrote I have authorised a 90-day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10 percent, also effective immediately.
Trump also said he would be raising tariffs in China to 125 percent, also effective immediately, citing the “lack of respect that China has shown to the world’s markets”.
The World Trade Organisation chief said Wednesday 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.
Okonjo-Iweala said that the US-China tariff war could reduce trade in goods between the two countries by 80 percent.
Okonjo-Iweala’s comments come after Trump’s comments raised tariffs in China to 125 percent on Wednesday.
“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,” Okonjo-Iweala said in a statement.
Okonjo-Iweala added that the tariff war could “severely damage the global economic outlook.”
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.”
