WTO urges US and China to show restraint as it cuts trade growth forecasts
The World Trade Organisation (WTO) has cut its growth forecasts as it urged America and China to show restraint over their escalating trade war.
Today the WTO cut its expectations for 2018 growth in merchandise trade volume to 3.9 per cent, from the 4.4 per cent estimated in April this year as it warned the world's largest economies to "work through their differences."
Read more: China accuses US of 'trade bullying' as tariffs kick in
The organisation also lowered the forecast for next year to 3.7 per cent.
WTO director general Roberto Azevedo said: “While trade growth remains strong, this downgrade reflects the heightened tensions that we are seeing between major trading partners.
"More than ever, it is critical for governments to work through their differences and show restraint. The WTO will continue to support those efforts and ensure that trade remains a driver of better living standards, growth and job creation around the globe.”
Continued escalation of the trade war between the US and China could cut global growth by 70 per cent and cost jobs, Azevedo warned on Tuesday.
President Donald Trump hit China with tariffs on a further $200bn (152.7bn) of US goods on Monday – on top of the duties on $50bn worth of products imposed earlier this year.
Beijing hit back with tariffs of its own on $110bn of US products.
Rising trade tensions are the biggest risk to growth, the WTO said, but monetary policy tightening and financial volatility could also destabilise trade.
Read more: China will 'open up' for business elsewhere as Trump's tariffs set to begin