Global Trade At Risk!’ – Okonjo-Iweala Cautions Against Escalating Tariff Wars

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The Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, has urged nations to avoid escalating tariff disputes, warning that a tit-for-tat trade war could have catastrophic consequences for the global economy.

Speaking during a panel discussion on tariffs at the World Economic Forum in Davos, Switzerland, Okonjo-Iweala issued her warning following threats of tariffs from former U.S. President Donald Trump against China, the European Union, Mexico, and Canada.

Recalling the disastrous effects of the Smoot-Hawley Tariff Act during the Great Depression in 1930, which led to retaliatory measures and worsened the global economic crisis, Okonjo-Iweala stressed the importance of restraint in managing trade disputes.

“Let’s not hyperventilate. I know we are here to discuss tariffs, but I’ve been urging everyone to take a step back and stay calm,” she said.

Addressing WTO members, she added, “Even if a tariff is imposed, don’t rush to retaliate without proper groundwork. If we engage in tit-for-tat retaliation—whether it’s 25 percent or 60 percent tariffs—and return to the conditions of the 1930s, we could see double-digit losses in global GDP. That would be catastrophic.”