World Trade Organization Director-General Dr. Ngozi Okonjo-Iweala, in reporting the WTO’s 2025 Forecast on April 16, stated that if the tariff war initiated by U.S. President Donald Trump against China is not resolved, goods trade between the world’s two largest economies could plummet by 80%, and lead to decoupling the two economies.
“I would like to make a few points,” Dr. Okonjo-Iweala said, “The first is on China, U.S. decoupling, which is a phenomenon that is really worrying to me. Beneath these the global figures I just quoted, lies a sharp projected decline in U.S.-China, bilateral trade. We currently estimate that merchandise trade between the two economies will fall by 81%—a drop that would have reached 91% without recent exemptions for products such as smartphones. A drop in U.S.-China trade of these magnitudes is tantamount to a decoupling of the two economies.”
Dr. Okonjo-Iweala had previously been Nigeria’s Finance Minister in 2003-2015.
U.S.-China two-way physical goods trade in 2024 totaled $582.4 billion (the U.S. exported $143.5 billion of goods; China exported $438.9 billion of goods), the largest trade between any two countries in the world. A reduction of this trade by 80% would collapse it to $116.5 billion, a loss of $465.9 billion of trade.
