World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala has cautioned nations against engaging in retaliatory trade wars, warning of catastrophic consequences for the global economy. Speaking at a panel discussion during the World Economic Forum in Davos, Switzerland, on Thursday, Okonjo-Iweala urged countries to avoid escalating tariff disputes and instead seek alternative resolutions.
“Please let’s not hyperventilate,” she said, addressing growing tensions following threats of tariffs by US President Donald Trump against China, the European Union, Mexico, and Canada. “I just sense a lot of hyperventilation. Could we chill, also?”
Drawing parallels to the economic fallout of the 1930s Smoot-Hawley Tariff Act in the United States, Okonjo-Iweala highlighted how retaliatory tariffs deepened the Great Depression. “We are very much saying to our members at the WTO: you have other avenues. Even if a tariff is levied, please keep calm. Don’t wake up and, without the necessary groundwork, levy your own,” she advised.
The WTO chief warned that tit-for-tat tariff escalations could result in double-digit losses in global GDP, a scenario she called “catastrophic.” She appealed for measured responses and international cooperation to prevent a repeat of past economic disasters.
Her remarks come as global trade tensions rise, threatening the stability of supply chains and economic recovery efforts.
