The world is caught in a “Prisoner’s Dilemma” over trade, according to the WTO’s World Trade Report 2026. Governments have a clear incentive to protect their own producers by raising tariffs or restricting imports. The problem starts when everyone else does the same, as per the trade organisation.
What looks like a sensible move for one country can quickly turn into a bad deal for everyone, it says, adding that retaliatory tariffs can shrink trade, raise uncertainty, squeeze exporters and push up prices for consumers. “The result can be mutually damaging, leaving economies worse off than if they had kept markets more open.”
