WTO Chief Urges Calm About Tariffs in International Trade Community
World Trade Organization Director-General Ngozi Okonjo-Iweala asked members of the international trade community at the World Economic Forum to stop "hyperventilating" about proposed tariffs from the Trump administration while warning that tariffs won't bring about the desired effects.
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She was speaking at a town hall debating the efficacy of tariffs at the WEF's Davos 2025 event, where she urged calm: "I know we are here to discuss tariffs. [But] I've been saying to everybody, could we chill also?"
While the threat of more tariffs espoused by U.S. President Donald Trump looms large, Okonjo-Iweala offered a rare spot of optimism. She said, "80% of world trade right now, world goods trade, is taking place on WTO terms, and world trade is at a peak of $30.4 trillion, which is higher than the pre-pandemic peak. So there's resilience."
She said that general panic among countries about tariffs will only lead to higher tariffs for everyone. If countries begin a retaliatory cycle of tariffs, "then we will have a self-fulfilling prophecy of tit-for-tat. And we've done the numbers. If we have tit-for-tat retaliation, whether it's 25% tariffs or 60%, and we go to where we were in the 1930s, we are going to see double-digit global GDP losses."
Ultimately, she warned the Trump administration that tariffs are nothing new, and they won't achieve the economic outcomes he is seeking: "We've been there before. We've seen this movie. As I said elsewhere, in the 1930s with the Smoot-Hawley Act. ... The Great Depression made it worse, and then the world came to see that this was not the way to go."