United Nations, April 09: Amid warnings of the risks of a recession from the trade war, UN Secretary-General Antonio Guterres says he “sincerely hopes” there won’t be one because of the effects it would have on the poorest.
“I sincerely hope that we will have no recession, because a recession will have dramatic consequences, especially for the poorest people in the world,” he said on Tuesday hours before President Donald Trump’s “reciprocal tariffs” were to come into effect.
“Trade wars are extremely negative. Nobody wins with a trade war. Everybody tends to lose”, he said while speaking to reporters.
He added, “I’m particularly worried with the most vulnerable developing countries, in which the impact will be more devastating”.
Trump has announced tariffs totalling 104 per cent against China that would go into effect at midnight Wednesday, and Beijing has vowed retaliatory tariffs of 34 per cent.
UN Conference on Trade and Development (UNCTAD) conceded that the “need for trade for reform is clear”.
UNCTAD Secretary-General Rebecca Grynspan said, “Global trade rules must evolve to reflect today’s challenges, but they must do so with predictability and development at their core, protecting the most vulnerable”.
“This is a time for cooperation, not escalation,” she said.
The World Trade Organisation (WTO) Deputy Director-General Angela Ellard said that the organisation’s preliminary analysis suggests that recent tariff measures by the US and others could lead to a contraction of global merchandise trade volumes of around one per cent this year.
That would be a significant downward revision of nearly four per cent from the earlier projection of three per cent growth.
Despite the attempts to undercut the WTO system, Ellard said that “74 per cent of global trade still flows under WTO Most-Favoured-Nation (MFN) terms”.
This shows that the WTO remains relevant, and the multilateral system continues to function effectively, she added.
According to the WTO, China and Canada have already initiated the process for taking up their disputes with the US.
They have requested consultations under the WTO framework which would give the parties 60 days to negotiate and avoid litigation.
If that failed, they could request adjudication by a panel.