The Director-General of the World Trade Organisation (WTO), Ngozi Okonjo-Iweala, on Thursday called for restraint amidst the ongoing dispute between the United States and other nations over tariffs.
She made the call after US President Donald Trump threatened tariffs against China, the European Union, Mexico, and Canada.
In her address during a panel discussion on tariffs at the World Economic Forum in Davos, Switzerland, the WTO chief warned that a tit-for-tat trade war would be “catastrophic” for the world’s economy.
She reminded the participants about the effects of the Smoot-Hawley Tariff Act in the US during the Great Depression in 1930, which prompted retaliation and worsened the global economic crisis at the time.
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“Please let’s not hyperventilate. I know we are here to discuss tariffs. I’ve been saying to everybody: could we chill, also? I just sense a lot of hyperventilation.
“We are very much saying to our members at the WTO: you have other avenues. Even if a tariff is levied, please keep calm, don’t wake up, and without the necessary groundwork levy your own.
“If we have tit-for-tat retaliation, whether it’s 25 percent tariffs, 60 percent, and we go to where we were in the 1930s, we are going to see double-digit global GDP losses, double-digit. That’s catastrophic,” the Nigerian former finance minister cautioned.