The Director-General of the World Trade Organization said new tariffs announced by the U.S. along with those introduced at the start of the year could lead to a contraction of around 1% in global merchandise trade volumes in 2025.

Trade flows would fall further if the U.S. were to respond to any retaliation with further tariff increases, said Ngozi Okonjo-Iweala, the WTO’s director general.

U.S. President Donald Trump's newly announced tariffs, set to take effect Saturday, impose a 10 percent baseline on all imports, with additional levies targeting nations with the largest trade deficits.