The World Trade Organization warned that a spike in trade restrictions by major nations is threatening to hold back the global economy.
Trade coverage on imports among Group of 20 countries -- including tariffs, import bans and new customs procedures -- topped $336 billion between October and May, the organization said in a report Monday. That’s the second-highest reading, after the prior period’s record $481 billion. The figure doesn’t include the actions under consideration or threatened by governments.
The finding “provides further evidence that the turbulence generated by current trade tensions is continuing, with trade flows being hit by new trade restrictions on a historically high level," WTO Director-General Roberto Azevedo said in the report. “This will have consequences in increased uncertainty, lower investment and weaker trade growth."
Escalating tariffs have fueled concerns that the months-long trade war between the U.S. and China could undermine a pickup in the global economy. The International Monetary Fund has cut its 2019 global outlook to the slowest pace since the financial crisis, citing trade tensions as a risk to growth. Much could depend on whether President Donald Trump can de-escalate tensions during a meeting with Chinese leader Xi Jinping during the G-20 meeting this week in Japan.
“Several significant trade-restrictive measures which fall outside of the review period remain under consultation for potential later implementation. This further compounds the challenges faced by governments, businesses and consumers in the current global economic environment," the WTO report noted.
The heightened tensions have thrown global goods exchange into turmoil as companies struggle to adjust their supply chains, stockpile items ahead of new sanctions, and rethink expansion plans. The uncertainty has hit the U.S. economy, with the manufacturing and trade-reliant sectors weakening.
There were 20 new trade-restrictive measures imposed in the latest period, fewer than recent months but the scale was much broader, the WTO said. The G-20 economies also introduced 29 new steps to facilitate trade, according to the report.