Latest news with #W.T.O.
New York Times
16-04-2025
- Business
- New York Times
W.T.O. Projects Sharp Pullback in Global Trade, Citing Trump's Tariffs
The World Trade Organization forecast on Wednesday that President Trump's trade policies would shave nearly three percentage points off the volume of global trade in goods this year, as tariffs raise the price of U.S. imports, invite retaliation and slow economic activity. At the start of the year, the W.T.O. expected goods trading to continue growing roughly in line with the global economy, expanding by 2.7 percent. Now it expects it to contract by 0.2 percent instead. That's a sharp drop from last year, when goods trade grew by 2.9 percent. Mr. Trump has introduced a suite of tariffs, including a 10 percent tariff on most of the world, a minimum tariff of 145 percent on U.S. imports from China, levies on goods from Canada and Mexico and sector-specific tariffs targeting steel, aluminum and vehicles. The Trump administration says this will help bring manufacturing back to the United States and boost the economy, though many economists have predicted the tariffs will instead be a drag on economic activity. The W.T.O., a Geneva-based group that monitors patterns in global trade and coordinates trade negotiations and disputes among its members, said that the estimates were based on the tariff situation as of Monday, and that trade could shrink further 'if the situation deteriorates.' The tariffs will have the biggest impact on trade in North America, the group said, where it expects exports will plummet 12.6 percent and imports will drop 9.6 percent in 2025. Asia will be the next most affected, but Asia and Europe will still post modest growth in both exports and imports, the group forecasts. The group said global trade was particularly at risk from the potential return of Mr. Trump's 'reciprocal tariffs.' The president paused those tariffs last week for 90 days, and the Trump administration is now trying to negotiate trade deals with individual countries. If they go back into effect, those levies plus the uncertainty they create for global businesses could cause global trade to shrink 1.5 percent this year, the W.T.O. said. The W.T.O. said the ongoing trade clash between the United States and China will be particularly disruptive. High tariffs between the countries would lead to a reshuffling in global trade, the group said. Chinese exports would be diverted from the United States to other parts of the world, and the United States would find new sources for imports of textiles, clothing and electrical equipment. Ngozi Okonjo-Iweala, the director general of the W.T.O., said she was 'deeply concerned by the uncertainty surrounding trade policy, including the U.S.-China standoff.' The recent pause in tariffs temporarily relieved some of that pressure, she said. 'However, the enduring uncertainty threatens to act as a brake on global growth, with severe negative consequences for the world, the most vulnerable economies in particular,' she said. Ms. Ngozi said there was a strong relationship between trade and economic growth, with the exchange of goods driving economic expansion in the past. 'We've seen that the trade concerns can have negative spillovers into financial markets, into other broader areas of the economy,' she said at a news conference Wednesday. 'But I'm also very concerned about impact on poor countries,' she added. 'How do we safeguard them?' In a report released Wednesday, the United Nations Trade and Development body also forecast that trade policy shocks, uncertainty and financial turbulence would weigh on global activity. It said global growth was expected to slow to 2.3 percent in 2025 from 2.8 percent the previous year, as the world economy entered 'a global recessionary phase.' Concerns about economic policy shifts have hit their highest mark this century, and uncertainty about trade policy is affecting businesses and long-term planning decisions, the U.N. agency said. For the first time, the W.T.O. also began projecting future patterns in trade in services, which includes sectors like business consulting, financial services, education and tourism. The Trump administration has focused its policies almost entirely on trade in goods, but the United States maintains a trade surplus in services, and the sector employs the vast majority of Americans. The W.T.O. said that services accounted for more than a quarter of global trade last year, and expanded by 9 percent in 2024 compared with the year prior. Although tariffs only apply to goods, their effects will also dampen services trade, the W.T.O. said.
New York Times
04-03-2025
- Business
- New York Times
China Retaliates Against Trump Tariffs as Superpower Trade War Escalates
Minutes after President Trump's latest tariffs took effect, the Chinese government said on Tuesday that it was imposing its own broad tariffs on food imported from the United States and would essentially halt sales to 15 American companies. China's Ministry of Finance put tariffs of 15 percent on imports of American chicken, wheat, corn and cotton and 10 percent tariffs on other foods, ranging from soybeans to dairy products. In addition, the Ministry of Commerce said 15 U.S. companies would no longer be allowed to buy products from China except with special permission, including Skydio, which is the largest American maker of drones and a supplier to the U.S. military and emergency services. Lou Qinjian, a spokesman for China's National People's Congress, chastised the United States for violating the World Trade Organization's free trade rules. 'By imposing unilateral tariffs, the U.S. has violated W.T.O. rules and disrupted the security and stability of the global industrial and supply chains,' he said. Mr. Trump has now tagged almost all goods from China with an extra 20 percent in tariffs since taking office in January. He announced 10 percent tariffs on Feb. 4 and another round on Tuesday. Mr. Trump also moved ahead on 25 percent tariffs on Mexico and Canada on Tuesday, after a monthlong delay. China had responded to the February tariffs by immediately announcing that it would start collecting, six days later, additional tariffs on liquefied natural gas, coal and farm machinery from the United States. But those tariffs combined hit only about a tenth of American exports to China, making them much narrower than Mr. Trump's comprehensive tariffs. Want all of The Times? Subscribe.
New York Times
14-02-2025
- Business
- New York Times
‘The W.T.O. Is Toast.' What Happens to Global Trade Now.
When President Trump announced he would impose new tariffs on imports from countries around the world, he launched a frontal attack on the global free trade system created in the aftermath of World War II. Mr. Trump's move, announced Thursday and set to begin as soon as April, represents a bet that the United States will gain leverage by replacing global tariffs with its own tariffs, which are taxes on imports. The United States, the world's largest importer, has for decades bought far more from the rest of the world than it sells. Mr. Trump wants to change that and is calculating that other countries, with more exports at stake, might be cautious about retaliating by raising their own tariffs. But instead, many trade experts warn, Mr. Trump's action could presage a global shift toward higher tariffs. That would pose a big challenge to the World Trade Organization, which was established in 1993 to coordinate global tariffs and trade rules. Decisions by other countries to follow Mr. Trump's example and set tariffs unilaterally could impede trade, raising prices for everyone. The free trade promise of consumers buying from the lowest-cost producers could be imperiled. 'I would say the W.T.O. is toast, but what matters now is how other members respond,' said Deborah Elms, the head of trade policy at the Hinrich Foundation, a research group in Singapore that favors free trade. 'Do they stand up for the system? Or do they also ignore key principles, provisions and practices?' How We Got Here: GATT and the W.T.O. The main agreement governing international trade, even today, is the General Agreement on Tariffs and Trade, or GATT. Only 23 countries, including colonial powers like Britain and France, signed that agreement in 1947. The pact's signatories agreed to charge the same tariffs to all other member countries — a crucial provision that Mr. Trump is challenging. Member nations negotiated for years to reduce these tariffs. The most important of these multiyear negotiations was the Uruguay Round, which led to an agreement in 1993 to reduce tariffs further. The negotiators, from 117 nations, also created the World Trade Organization to administer GATT rules and negotiations and to provide binding arbitration of disputes. An American Backlash Against the W.T.O. At the start of President Trump's first term, he and his trade advisers voiced frustration with how the W.T.O.'s arbitration panels had worked out. They contended that the panels were reluctant to condemn export subsidies and other measures by countries like China that sought to strengthen their manufacturing sectors, in violation of the rules of free trade. And they complained that the panels often decided against the United States. Mr. Trump blocked the naming of judges to the W.T.O.'s top body for resolving disputes. That body became unable to meet as judges' terms expired, and could no longer issue binding verdicts. Trade officials in Mr. Trump's first term discussed whether to rewrite tariff rates, but decided that would be a step too far. The prospect of setting new tariffs for more than 4,000 import categories for U.S. trade with more than 150 countries was too daunting. But Mr. Trump is preparing to do just that, overturning GATT's most basic rules by setting tariffs unilaterally. The U.S. would match other countries' tariffs and then add further tariffs to offset subsidies and non-tariff trade barriers in those countries. Mr. Trump particularly complained about value-added taxes in Europe and very steep tariffs in developing countries. Steep Tariffs in Developing Countries When GATT was established in 1947, only a handful of countries had industrialized their economies, and many of them were in ruins because of World War II. As colonial empires broke up into numerous developing countries, leaders of the world's poor countries worried that they might never have a chance to develop manufacturing industries. Developing countries insisted on keeping high tariffs to limit imports of factory goods. They also insisted on being allowed to subsidize their agricultural sectors to try to become self-sufficient in food. Some of these developing countries, like China and India, are now among the world's largest economies. But they have maintained their status as developing countries under GATT rules, allowing them to keep tariffs much higher than in developed economies and heavily subsidize agriculture. Only in response to Trump's trade war in 2018 and 2019 did China begin to reduce its tariffs voluntarily, while retaining the world's largest agricultural subsidies. Mr. Trump signaled that developing countries with high tariffs may be hit with equally high American tariffs. But developing countries, including China and India, contend that while their industrial sectors have grown enormously, their populations are not yet affluent. They still have low average incomes per person and want to remain mostly self-sufficient in food. The dilemma now for Europe and most developing countries is that they desperately need to run trade surpluses with the United States to afford their large trade deficits with China. If they retaliate against President Trump's tariffs, they may trigger a global trade war and doom the W.T.O., which has helped them grow faster for so long.
