On January 23, Ngozi Okonjo-Iweala, the Director-General of the World Trade Organization (WTO), issued a serious warning about the potential consequences of a US-Russia trade war. Okonjo-Iweala expressed concern that if countries begin responding to the US’s trade threats with similar actions, it could lead to a “catastrophic” situation for the global economy.

The comments came after President Trump threatened to escalate trade tensions with Russia over the ongoing conflict in Ukraine. Okonjo-Iweala urged nations not to retaliate, as it could spark a dangerous cycle of trade wars that could harm economies worldwide. She pointed out how trade restrictions during the Great Depression in the 1930s had a negative impact, and warned against repeating such mistakes.

Okonjo-Iweala speaking during the World Economic Forum annual meeting at the Swiss resort of Davos said: “If we have tit-for-tat retaliation, whether it’s 25% tariff (or) 60% and we go to where we were in the 1930s we’re going to see double-digit global GDP losses. That’s catastrophic. Everyone will pay.”

As tensions rise and countries weigh their options in response to Trump’s policies, the WTO chief’s message is clear: escalating trade wars could have far-reaching, damaging effects.

“We’ve seen this movie, as I said, elsewhere in the 1930s with the Smoot-Hawley Act. It made it worse,” she said.

“We’re very much saying to our members at the WTO, you have other avenues, even if a tariff is levied, please keep calm.”