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Wednesday, February 12, 2025

Donald Trump and tariffs. Trade wars would be 'catastrophic'

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Disastrous consequences: Ngozi Okonjo-Iweala said on Thursday that any “retaliation for retaliation” trade wars triggered by threats of tariffs by US President Donald Trumpthey will have disastrous consequences for global economic growth. The head of the WTO called on countries to refrain from such actions.

“We will return to the situation of the 1930s”: – If we retaliate, will it be 25 percent? customs duties or 60 percent, we will return to the situation from the 1930s. We'll see double-digit losses in global GDP. This catastrophe. Everyone will pay for it, added Okonjo-Iweala during the World Economic Forum in Davos, quoted by Reuters.

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Appeal for calm: The head of the WTO referred to the interwar period, when countries introduced trade restrictions in response to the American one Smoot-Hawley Tariff Act of 1930 “We are saying very strongly to WTO members that you have other options, even if tariffs are imposed, please remain calm,” Okonjo-Iweala said. At the same time, she called on countries “to analyze all their options and use the WTO system to resolve disputes.”

Trump attacks Europe: Donald Trump on Thursday, he spoke remotely at the World Economic Forum in Davos and again criticized Europe. – They do not buy our agricultural products, they do not buy our cars, but they shower us with millions of their own – he said. Trump also accused the EU of imposing sanctions on the United States “uneconomic and non-monetary tariffs”which make it difficult to export American products to Europe. He also stated that Europe imposes a lot of different fees on the US and it is worse in this respect than China.

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Europe will answer: Trump added that his “message to everyone companies in the world is simple.” – Come produce your product in USAand we will give you some of the lowest taxes in the world. However, if you don't make your product in America, you will have to pay customs duty – said the US president. Valdis Dombrovskis, EU Commissioner for the Economy, recently stated that if Trump will introduce tariffs on products from EU countriesEurope will respond with tariffs.

See also: European Union is getting ready for Trump's tariffs. More on this subject in the text entitled “Europe will react to Trump's move. 'We are ready to defend our values'”.

Sources: ReutersIAR



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