World Trade Organisation chief Ngozi Okonjo-Iweala urged nations Thursday to keep calm over tariffs, warning that a tit-for-tat trade war would be โcatastrophicโ for the world economy.
Okonjo-Iweala issued her appeal during a panel discussion on tariffs at the World Economic Forum in Davos, Switzerland, in a week that saw US President Donald Trump threaten tariffs against China, the European Union, Mexico and Canada.
The WTO director general urged cooler heads to prevail, quipping: โPlease letโs not hyperventilate. I know we are here to discuss tariffs. Iโve been saying to everybody: could we chill, also. I just sense a lot of hyperventilation.โ
She recalled the fallout from the Smoot-Hawley Tariff Act in the United States during the Great Depression in 1930, which prompted retaliation and worsened the global economic crisis at the time.
โWe are very much saying to our members at the WTO: you have other avenues. Even if a tariff is levied, please keep calm, donโt wake up and without the necessary groundwork levy your own,โ she said.
โIf we have tit-for-tat retaliation, whether itโs 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. Thatโs catastrophic.โ
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