Rules-based global trading system at risk of derailment

The head of the United Nations said on Wednesday that the global trade system was facing major challenges due to tariffs, with developing countries worst affected.

"The rules-based trading system is at risk of derailment," U.N. Secretary General Antonio Guterres told delegates at the U.N. Trade and Development conference in Geneva on Wednesday, pointing to concerns of trade wars and rising trade barriers.

U.S. President Donald Trump's tariff decisions since he took office in January have shocked financial markets and sent a wave of uncertainty through the global economy.

On August 7, Trump imposed higher tariffs on imports from dozens of countries, leaving major trade partners like Switzerland, Brazil and India scrambling for a better deal.

"Supply chains are in turmoil, and trade barriers are rising, with some least developed countries facing extortionate tariffs of 40% despite representing barely 1% of global trade flows," Guterres said.

While the EU has struck a deal setting duties at 15% on most goods it exports to the United States, they are often much higher on so-called least developing countries.

Laos, for example, faces tariffs at 40%.