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>>> Tariff war risks sinking world into new Great Depression, International Chamber of Commerce warns


The Wall Street Journal

Joshua Kirby

March 4, 2025


https://finance.yahoo.com/news/tariff-war-risks-sinking-world-090500002.html


The world economy could face a crash similar to the Great Depression of the 1930s unless the U.S. rows back on its plans to impose steep tariffs on imports, a senior official at the International Chamber of Commerce warned.

“Our deep concern is that this could be the start of a downward spiral that puts us in 1930s trade-war territory,” said Andrew Wilson, deputy secretary-general of the ICC, which promotes global business and trade. High tariffs on foreign goods imported into the U.S. in that decade contributed to a damaging global recession. The downturn plunged nearly a third of the global workforce into unemployment and slashed production at heavyweight industrial economies Germany and the U.S. by half, according to research from the International Monetary Fund.

The likelihood of a similarly severe blow to the global economy is high, Wilson said in an interview Tuesday. “Right now it’s a coin-flip,” he said. “It comes down to whether the U.S. administration is willing to rethink the utility of tariffs.”

His comments come after tariffs of 25% on imports from Canada and Mexico came into effect in the U.S., stymieing hopes of an eleventh-hour reprieve. Fresh duties were also added to Chinese goods sold to the country. Trump has promised to impose similar tariffs on European goods, raising the prospect of retaliation in kind and a global trade war.

“That puts us in a remarkably precarious position that will cloud the global economy for the coming months,” Wilson said.

President Trump was voted into office in November after a campaign centred on pledges to protect U.S. manufacturers by raising the barrier for imports into the country from abroad. Trump has repeatedly pointed to the U.S. deficit in its good trade with many partners, including China and the EU, calling those gaps unfair. But economists warn that a steep rise in import costs could cause a renewed spike in price inflation in the U.S.

“There is a real risk to [American] domestic economy of taking a tariff-led approach,” Wilson said. Many U.S. trade-sensitive stocks suffered sell-offs Monday after Trump reiterated his tariff plans.

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