The World Trade Organization (WTO) is warning that trade restrictions initiated by G20 nations are weighing on the global economy, still struggling to recover from the financial crisis.
In its latest monitoring report, the WTO report published on Wednesday suggests that protectionist measures have nearly doubled since October 2017 in Germany, France, the UK, China, Japan and the United States.
Trade barriers have been proliferating in response to a series of tariff barriers raised by US President Donald Trump, met by retaliatory measures by China, Canada and the EU. The US President believes that the current multilateral trade system discriminates against the US.
Measures affect iron, steel, plastics, vehicles and auto parts. The report notes that the global trade system as such is at risk, placing economic growth “in jeopardy.” A study by the Oxford Economics think-tank warns that trade barriers introduced are costing the global economy $60bn and further escalation could push that to $800bn.
The current escalation of trade measures threatens global growth, according to WTO Director-General Roberto Azevedo.
President Trump is threatening the European auto industry with a 20% import tariff, while the EU levies 10% on US cars. Current tariff levels in the US are 2,5% for EU cars and 25% on EU trucks.
Attempting to deescalate the confrontation between Washington and Brussels, the US Ambassador to Berlin Richard Grenell met with representatives of the German auto industry on Wednesday. Ambassador Grenell proposes a mutual abolition of all tariffs for cars on both sides of the Atlantic; the proposal was endorsed, Handelsblatt reports.
Current retaliatory EU tariffs have targeted Harley Davidson motorcycles.