Rules-based trading system at risk of derailment, says UN chief

United Nations Secretary-General António Guterres warned on Wednesday that the global trading system is under severe strain from escalating tariffs, with developing nations bearing the brunt of the impact.

“The rules-based trading system is at risk of derailment,” Guterres told delegates at the UN Trade and Development conference in Geneva, highlighting rising trade barriers and fears of trade wars.

U.S. President Donald Trump’s tariff hikes since taking office in January have unsettled financial markets and injected widespread uncertainty into the global economy.

On 7 August, Trump sharply increased tariffs on imports from dozens of countries, leaving key trade partners such as Switzerland, Brazil, and India scrambling to negotiate more favourable terms.

“Supply chains are in turmoil, and trade barriers are climbing, with some of the least developed countries facing punitive tariffs of up to 40%, despite accounting for barely 1% of global trade flows,” Guterres said.

While the European Union has reached an agreement to cap tariffs at 15% on most goods exported to the United States, rates on products from the least developed nations remain far higher — Laos, for example, faces a 40% duty.

Earlier this month, the World Trade Organization cut its forecast for global merchandise trade volume growth in 2026 to 0.5%, citing the delayed effects of U.S. tariffs, a steep downgrade from its earlier August projection of 1.8%.

Trump’s tariff measures have also strained the global trade rules set by the WTO. In April, a former WTO chief warned that unless the organisation reforms swiftly, the future framework for international trade could be shaped outside the 30-year-old watchdog.

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