The World Trade organisation ( WTO), Director-General, Ngozi Okonjo-Iweala calls for calm as global tariff disputes intensify, warning that retaliatory trade wars could cause “catastrophic” economic damage.
Speaking at the World Economic Forum on Thursday, Okonjo-Iweala urged countries to refrain from escalating tensions, drawing attention to the devastating consequences of the 1930 Smoot-Hawley Tariff Act.
“As we discuss tariffs, I’m asking for calm,” she said with a smile. “Please let’s not hyperventilate. I know there’s a lot of heat in the room, but we have to keep perspective.”
Okonjo-Iweala’s remarks come in the wake of U.S. President Donald Trump’s recent threats to impose tariffs on China, the European Union, Mexico, and Canada, emphasising the importance of diplomatic dialogue over retaliation.
“We have other avenues to resolve disputes,” she added. “Even if tariffs are imposed, countries must avoid knee-jerk reactions. We don’t need more escalation.”
Referring to the aftermath of the Smoot-Hawley Act, which deepened the Great Depression, she warned of the catastrophic impact of continued trade wars: “If we see tit-for-tat retaliation, we risk global GDP losses in the double digits. That would be disastrous.”
