Ngozi Okonjo-Iweala, the director general of the World Trade Organization (WTO), issued a warning on Thursday, January 23, against any retaliatory trade wars stemming from the United States and President Donald Trump’s tariff threats against various nations.
Calling such a possible scenario “catastrophic,” Okonjo-Iweala urged other states to abstain from retaliating in like against Trump.
Her remark followed Trump’s threat of trade warfare with Russia over the conflict in Ukraine.
Okonjo-Iweala speaking during the World Economic Forum annual meeting at the Swiss resort of Davos said: “If we have tit-for-tat retaliation, whether it’s 25% tariff (or) 60% and we go to where we were in the 1930s we’re going to see double-digit global GDP losses. That’s catastrophic. Everyone will pay.”
Referring to the two World Wars, countries implemented trade restrictions in reaction to a US tariff act in 1930.
“We’ve seen this movie, as I said, elsewhere in the 1930s with the Smoot-Hawley Act. It made it worse,” she said.
“We’re very much saying to our members at the WTO, you have other avenues, even if a tariff is levied, please keep calm.”
A Gentle Reminder: Every obstacle is a stepping stone, every morning; a chance to go again, and those little steps take you closer to your dream.
Nnamdi Okoli