Increase in tariffs and import duties to US$588 billion could threaten global economy, World Trade Organisation warns
- United States has announced duty on US$250 billion of imports from China during trade war before temporary truce agreed between Xi Jinping and Donald Trump
- Head of Geneva-based WTO Roberto Azevedo urges members to ‘use all means at their disposal to de-escalate the situation’
Restrictive trade measures including tariffs and import duties rose sharply over the past year and could threaten global economic growth and jobs, according to the World Trade Organisation.
World Trade Organisation (WTO) members applied 137 new trade-restrictive measures during the year that ended in October, up from 108, according to the Geneva-based organisation.
The coverage of these trade-restrictive measures amounts to US$588 billion, more than seven times larger than a year ago.
“This proliferation of trade restrictive measures and the uncertainty created by such actions could place economic recovery in jeopardy,” said WTO director general Roberto Azevedo.
“Further escalation would carry potentially large risks for global trade, with knock-on effects for economic growth, jobs and consumer prices around the world.”
The report comes as the US and China seek to ease trade tensions that have roiled global markets.
Since April, the US has announced three rounds of tariffs on as much as US$250 billion of imports from China, which has retaliated in kind.
The US has warned that it could increase the tariff rate on US$200 billion of Chinese exports from 10 to 25 per cent if no further deal is reached by March 1, after Chinese President Xi Jinping and US President Donald Trump earlier this month agreed a 90-day trade war truce.
The WTO defines trade-restrictive measures as new or increased tariffs, customs procedures, quantitative restrictions and local content measures.
The WTO cut its outlook for global commerce through 2019 and warned that tension between major trading partners increasingly threatens economic growth.
In September, the WTO said it expects world merchandise trade growth will slow to 3.9 per cent in 2018 and 3.7 per cent in 2019, compared with 4.7 per cent in 2017.
“I urge WTO members to use all means at their disposal to de-escalate the situation,” added Azevedo.