Okonjo-Iweala Warns Against Tariff Retaliation, Cites Global Economic Risks

Kehinde Fajobi

World Trade Organisation (WTO) Director-General Ngozi Okonjo-Iweala has cautioned nations against escalating trade tensions, warning that retaliatory tariffs could have devastating effects on the global economy.

Speaking at the World Economic Forum in Davos, Switzerland, on Thursday, Okonjo-Iweala urged restraint amid heightened discussions on tariffs, particularly following threats by US President Donald Trump to impose tariffs on China, the European Union, Mexico, and Canada.

“Please let’s not hyperventilate. I know we are here to discuss tariffs,” she said. “I’ve been saying to everybody: could we chill, also. I just sense a lot of hyperventilation.”

Drawing a historical parallel, she referenced the Smoot-Hawley Tariff Act of 1930 during the Great Depression, which triggered retaliatory measures and worsened the global economic crisis.

“We are very much saying to our members at the WTO: you have other avenues,” she said. “Even if a tariff is levied, please keep calm, don’t wake up and without the necessary groundwork levy your own.”

Okonjo-Iweala warned that tit-for-tat tariffs, ranging from 25 to 60 percent, could lead to double-digit global GDP losses. “That’s catastrophic,” she emphasised.