The World Trade Organisation (WTO) has issued a stern warning against escalating trade tensions after US President Donald Trump threatened to impose higher tariffs on goods imported into the United States. WTO Chief Ngozi Okonjo-Iweala urged nations to exercise restraint, cautioning that a retaliatory tariff war could have disastrous consequences for the global economy.
Speaking on Thursday at the World Economic Forum in Davos, Switzerland, Okonjo-Iweala appealed for calm, emphasizing the importance of avoiding hasty responses. “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,” she stated.
The chief, who previously served as Nigeria’s Finance Minister, highlighted the lessons of history, pointing to the Smoot-Hawley Tariff Act enacted during the Great Depression in 1930. The legislation triggered widespread retaliation, deepening the economic crisis of the era.
“If we have tit-for-tat retaliation, whether it’s 25% tariffs, 60%, and we go to where we were in the 1930s, we are going to see double-digit global GDP losses. That’s catastrophic,” she warned.
Trump’s tariff threat, issued shortly before his inauguration as the 47th President of the United States, targeted several key trading partners, including China, the European Union, Mexico, and Canada.
In response, Canada has cautioned against the potential impact of US tariff hikes, signaling its readiness to implement countermeasures on American goods if necessary.
The WTO Chief reiterated that member nations should explore alternative avenues to address trade disputes rather than resorting to retaliatory actions. “Even if a tariff is levied, please keep calm, don’t wake up and, without the necessary groundwork, levy your own,” she urged.
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