World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala issued a warning on Thursday, January 23, cautioning against retaliatory trade wars sparked by U.S. tariff threats under President Donald Trump.
Okonjo-Iweala urged countries not to mirror the U.S.’s actions, describing such a scenario as “catastrophic.”
Her remarks followed Trump’s threats of a trade war with Russia over the ongoing conflict in Ukraine.
Speaking at the World Economic Forum in Davos, Switzerland, Okonjo-Iweala said, “If we engage in tit-for-tat retaliation—whether it’s a 25% tariff or 60%—and we escalate to the levels we saw in the 1930s, we’re looking at double-digit global GDP losses. That’s catastrophic. Everyone will suffer.”
She drew a parallel to the protectionist measures of the 1930s, referencing the Smoot-Hawley Act, which contributed to worsening the Great Depression.
“We’ve seen this story before, in the 1930s with the Smoot-Hawley Act,” she noted. “It only made things worse.”
She also emphasized the need for calm, advising WTO members to explore other avenues, even if tariffs are imposed, to avoid escalating tensions.
