BUSINESS NEWS: WTO CHIEF WARNS AGAINST ‘CATASTROPHIC’ TIT-FOR-TAT TARIFFS
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Ngozi Okonjo-Iweala, the head of the World Trade Organisation, warned that a tit-for-tat trade war would be “catastrophic” for the global economy and asked countries to remain calm on tariffs on Thursday.
In a week when US President Donald Trump threatened to impose tariffs on China, the European Union, Mexico, and Canada, Okonjo-Iweala made her plea at a panel discussion on tariffs at the World Economic Forum in Davos, Switzerland.
The WTO director-general urged cooler heads to prevail, quipping: “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 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.
“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 said.
“If we have tit-for-tat retaliation, whether it’s 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. That’s catastrophic.”
AFP
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