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Global Alarm Bells Sound Over Full-Blown Trade War

Fears of the first full-scale tariff war since the 1930s have been raised by the head of the World Trade Organisation, in a direct warning to Donald Trump that his proposed levies on steel and aluminium will trigger a domino effect that will lead to global recession.

In a sign of growing international alarm at the possible consequences of Trump’s protectionist measures, Roberto Azevedo, the WTO’s director general, said “in the light of recent announcements on trade policy measures, it is clear we now see a much higher and real risk of triggering an escalation of trade barriers around the world.”

The U.S. president responded to Azevedo’s warning — and a separate call from the Paul Ryan, the Republican speaker of the House of Representatives — by saying he would not back down on last week’s threat to put a 25-percent tariff on steel imports and a 10-percent tariff on aluminium imports.

Trump rejected the idea that his measures — announced as a way of defending America’s national security — would lead to a trade war, even though his announcement has already prompted the threat of retaliation from the European Union, Canada, Brazil and China.

Azevedo told a tense meeting of WTO members in Geneva that “an eye for an eye will leave us all blind and the world in deep recession.”

Tit-for-tat protectionism was a feature of the 1930s as countries sought to find ways of helping domestic manufacturers through the Great Depression. “We must make every effort to avoid the fall of the first dominoes,” Azevedo said.

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In a sign of growing international alarm at the possible consequences of Trump’s protectionist measures, Roberto Azevedo, the WTO’s director general, said “in the light of recent announcements on trade policy measures, it is clear we now see a much higher and real risk of triggering an escalation of trade barriers around the world.”

The U.S. president responded to Azevedo’s warning — and a separate call from the Paul Ryan, the Republican speaker of the House of Representatives — by saying he would not back down on last week’s threat to put a 25-percent tariff on steel imports and a 10-percent tariff on aluminium imports.

Trump rejected the idea that his measures — announced as a way of defending America’s national security — would lead to a trade war, even though his announcement has already prompted the threat of retaliation from the European Union, Canada, Brazil and China.

Azevedo told a tense meeting of WTO members in Geneva that “an eye for an eye will leave us all blind and the world in deep recession.”

Tit-for-tat protectionism was a feature of the 1930s as countries sought to find ways of helping domestic manufacturers through the Great Depression. “We must make every effort to avoid the fall of the first dominoes,” Azevedo said.

Read full article