WTO Warns of Major Trade Decline as US-China Tariff War Escalates

China raised the new tariffs on goods from the USA to 84 percent. The USA's President Donald Trump in turn raised the tariffs on Chinese goods to 125 percent. The WTO warns that trade between the two countries may decrease by 80 percent.

» Updated: April 10 2025

» Published: April 09 2025

WTO Warns of Major Trade Decline as US-China Tariff War Escalates
Photo: Aaron Favila/pool/AP/TT

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The Chinese tariffs on goods from the USA come into force at 6.01 am on Thursday, Swedish time. China is then imposing an 84 percent tariff on American goods, in response to the USA announcing increased tariffs on Chinese goods.

China has also filed a complaint with the World Trade Organization (WTO) regarding the American tariffs, according to the Chinese Ministry of Commerce.

A spokesperson for the Chinese government says that the USA's tariffs against China are "a serious mistake" and compares the American actions to bullying.

"China has initiated a procedure within the framework of WTO's dispute settlement mechanism", says the spokesperson according to the state news agency New China.

"Harming themselves"

On Wednesday evening, Swedish time, Donald Trump announced that the American tariffs on Chinese goods are increased to 125 percent "with immediate effect".

At the same time, the USA's Finance Minister Scott Bessent says that countries that choose to approach China in trade issues are harming themselves.

It would be like cutting one's own throat, says Bessent according to AFP.

They just keep producing and producing, dumping and dumping, and it takes its toll somewhere, says Bessent, referring to China.

The WTO warns that trade between China and the USA may decrease significantly, which will affect global trade.

"Our preliminary calculations show that trade in goods between the two countries decreases by as much as 80 percent", says WTO chief Ngozi Okonjo-Iweala in a statement on Wednesday.

Dangerous fragmentation

"Particularly worrying is a possible fragmentation of global trade along geopolitical lines", notes the WTO chief and estimates a decrease in global GDP of nearly 7 percent.

The current phase of the trade war began with what Trump called "Freedom Day", when high trade tariffs against large parts of the world were presented last week.

Corrected: In an earlier version of the text, there was an incorrect time indication for when the Chinese tariffs come into force.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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