WTO Director-General Ngozi Okonjo-Iweala has cautioned that the US-China tariff standoff could reduce trade in goods between the two nations by as much as 80%, with potentially devastating effects on the global economy.

In a statement released on Wednesday, April 9, Okonjo-Iweala sounded the alarm following US President Donald Trump's decision to hike tariffs on Chinese imports to 125%, escalating tensions between the world’s two biggest economies.

“The growing strain in US-China trade relations presents a serious threat of a steep drop in bilateral trade,” she warned. “Initial estimates indicate that goods trade between the two nations could plummet by up to 80%.”

Okonjo-Iweala also raised concerns that the US-China trade conflict could fracture the global economy into two competing blocs—one orbiting the US, the other China.

She warned that this division could drag down global real GDP by nearly 7% over the long term.

Despite ramping up tariffs on Chinese goods, President Trump has temporarily delayed further tariff hikes on other nations for 90 days, following diplomatic efforts to de-escalate tensions.

The trade standoff intensified as Trump bumped tariffs on Chinese products to 104%, following China’s countermeasure of raising duties on U.S. imports to 84%.

Okonjo-Iweala, renewing her appeal for swift dialogue, urged WTO members to prioritize unity and cooperation to avert deeper economic shocks.

Trump, on the other hand, took to social media to justify the move, stating that China was targeted with special tariffs due to its disregard for global trade norms.