Full-scale trade war between the US and China could shrink the volume of world trade by 17.5%, according to the World Trade Organization (WTO).
“The trade conflict may wipe out an average of 1.9% of the global economy”, said the WTO Director, Roberto Azevedo.
The IMF calculations show that both China and the United States suffer from the trade conflict. Customs duties on goods worth 360 billion USD have already been announced. Along with the duties on cars and car parts, which Washington threatens its partners, they can cost the US economy 0.9% of its growth, while China will suffer with 0.6% of its growth.
“The trade war is still incomplete”, said the WTO Director, Roberto Azevedo. “There are also no signals of constructive negotiations between the two countries”, added he.
The WTO chief said he was open to the demands of the United States and President Donald Trump on global trade system reforms. In his words, the WTO is conducting a multilateral dialogue to reform the organization and world trade with the US, the European Union, China and Japan.
Roberto Azevedo specified that certain measures have not yet been taken, as the discussion is at the very early stage.
The G20 will discuss the WTO reform at the summit in November.
Roberto Azevedo warned of a possible escalation of the world trade pressure and its negative impact on the global economy.