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Trade wars could leave world in 'deep recession,' World Trade Organization chief says

World Trade Organization Director-General Roberto Carvalho de Azevedo attends a press conference at the German federal Chancellery on March 11, 2015 in Berlin, Germany. Azevedo warned against harsh trading policies that could result in a trade war. (Adam Berry/Getty Images)

Roberto Azevedo, director-general of the World Trade Organization, sternly warned on Monday that a trade war could have serious consequences for the worldwide economy, The Hill reported. While he didn’t specifically mention President Donald Trump, he did express concern about the recent announcement of tariffs on steel and aluminum.

What did Azevedo say?

In light of recent announcements on trade policy measures, it is clear that we now see a much higher and real risk of triggering an escalation of trade barriers across the globe. We cannot ignore this risk and I urge all parties to consider and reflect on this situation very carefully.

Once we start down this path, it will be very difficult to reverse direction. An eye for an eye will leave us all blind and the world in deep recession. We must make every effort to avoid the fall of the first dominoes. There is still time.

The WTO is clearly concerned at the announcement of US plans for tariffs on steel and aluminum. The potential for escalation is real, as we have seen from the initial responses of others. A trade war is in no one’s interests.

‘Not a zero-sum game’

Sen. Jeff Flake (R-Ariz.) also criticized Trump’s trade moves Monday.

“Free trade is not a zero-sum game,” Flake said on Twitter. “Mexico and Canada have benefitted handsomely from NAFTA — and so have we. Trade wars are not won, only lost.”

Trump, when announcing plans for a 25 percent tariff on steel imports and 10 percent on aluminum, said that “trade wars are good, and easy to win.”

White House criticizes WTO

White House trade adviser Peter Navarro criticized the WTO on Sunday, placing blame on them for bad trade arrangements.

“A lot of the problem has been the World Trade Organization, which is over 160 countries, and a lot of them simply don’t like us and so we don’t get good results there,” Navarro said. “But we are fair and reciprocal traders and the World Trade Organization I think needs to change with the times.”

One last thing…
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