Crypto News: Supply Lines: Everyone ‘chill’

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The head of the World Trade Organization had a suggestion for the audience in Davos, Switzerland, gathered to hear her speak about a word that's been raising anxiety in boardrooms, government capitals and trading floors all week: tariffs.

The broader context was President Donald Trump's belief that higher import taxes are a cure-all for the US's economic, societal and fiscal woes.

"Please let's not hyperventilate," WTO Director-General Ngozi Okonjo-Iweala said Thursday. "Could we chill?"

In her opening remarks for a town hall session, she went on to explain that the value of world trade has surpassed its pre-pandemic peak, demonstrating "resilience," and that raising barriers like tariffs can backfire.

"Does that mean I'm not concerned? No, I'm not trying to say that," Okonjo-Iweala said. "But I just sense a lot of hyperventilation and we need to take a deep breath."

She also said she's puzzled by America's drift toward protectionism given that it's the world leader in services trade — specifically, digital commerce and data flows dominated by US tech giants.

Sitting next to her was Valdis Dombrovskis, the former European Union trade minister who's now economy minister.

He said "countless studies" show the free-flow of trade across the 27-nation bloc have served the region very well. History holds "no good lessons" about the benefits of protectionism, he added.

"We do not see protectionism as an answer for economic problems," he said. "But of course when we are discussing international trade, it's very important that it's fair trade and that it's based on a level playing field."

More highlights from Davos:

Back in 2017, Xi Jinping became the first Chinese head of state to address the World Economic Forum in Davos. This time, China's presence is toned down.
Egypt is "cautiously optimistic" a ceasefire between Israel and Hamas will eventually translate into a recovery in Suez Canal revenue.
Spanish Prime Minister Pedro Sanchez, in an interview with Bloomberg TV, says the EU needs to constructively engage with the Trump administration in the US.
The United Arab Emirates sees global trade growing this year, despite US threats of widespread tariffs.
The global elite breathed a sigh of relief after Trump spent his first few days only talking about trade wars rather than starting any.

—Brendan Murray in London

Click here for more of Bloomberg.com's most-read stories about trade, supply chains and shipping.

Charted Territory

Bigger imbalance | Japan's trade surplus with the US last year far surpassed its average levels during Trump's first term. the data leaves Japan at the mercy of further attacks from Trump, who has criticized countries with large trade surpluses with the US. While Japan has argued that it has also invested significant amounts in the US and boosted employment, the trade balance data will likely be one element that's thrown around in future trade negotiations, as firms brace for tariffs.

Today's Must Reads

Secretary of State Marco Rubio plans to travel to Panama as part of a trip to Latin America as soon as next week, underscoring Trump's seriousness about taking back the Panama Canal.
Yemen's Houthi rebels said they have released the crew of a commercial vessel that they hijacked over a year ago, the latest step in the easing of risks to ships in the Red Sea region.
Alcoa, the largest US aluminum producer, warned that a threatened 25% tariff on imports of the metal from Canada would have a "quieting effect" on American consumption. Separately, Stellantis is recommitting to US factory investments agreed to more than a year ago.
India's government is evaluating options ranging from a trade deal, cutting tariffs and importing more goods from the US if President Donald Trump follows through with threatened trade action.
Argentine President Javier Milei said he would leave Mercosur if necessary to cement a free-trade agreement with the US, although he hopes to reach a deal without needing to take such drastic action.
In this Talking Transports podcast, the president and CEO of the American Trucking Associations, shares his insights how a more common-sense approach to lower emissions could be better for the industry, environment and economy.
South Korea's economy continued to sputter last quarter after President Yoon Suk Yeol's short-lived declaration of martial law battered consumer confidence just as businesses and policymakers were already fretting about the possibility of US tariffs.

Highlights From Bloomberg Economics

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