The Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala has warned member nations to avoid escalating tariff conflicts.
Okonjo-Iweala, who spoke during the World Economic Forum in Davos, Switzerland on Thursday, cautioned that a retaliatory trade war could have “catastrophic” consequences for the global economy.
She called for calm amid concerns over tariff threats from US President Donald Trump against China, the European Union, Mexico and Canada.
“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,” Okonjo-Iweala said.
Speaking further, she advised member countries to opt for alternatives for dispute resolution rather than resorting to retaliatory measures.
“Even if a tariff is levied, please keep calm, don’t wake up and without the necessary groundwork levy your own.
“If we have tit-for-tat retaliation, whether it’s 25 per cent tariffs, 60 per cent, 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,” she added.