Impact of tariffs on developing countries could be ‘catastrophic’, says UN trade agency
Sign up now: Get ST's newsletters delivered to your inbox
Global trade could shrink by 3 to 7 per cent and global GDP by 0.7 per cent.
PHOTO: REUTERS
Follow topic:
GENEVA – Sweeping tariffs under US President Donald Trump and countermeasures could have a “catastrophic” impact on developing countries, hitting even harder than foreign aid cuts, the director of the United Nation’s trade agency said on April 11.
Global trade could shrink by 3 per cent to 7 per cent and global gross domestic product by 0.7 per cent, with developing countries the worst affected, the International Trade Centre (ITC) said.
“It is huge,” Ms Pamela Coke-Hamilton, executive director of the ITC, told Reuters.
“If this escalation between China and the US continues, it will result in an 80 per cent reduction in trade between the countries, and the ripple effect of that across the board can be catastrophic,” she warned.
Global markets continued to face turmoil on April 11, after Mr Trump announced a 90-day tariff pause on dozens of countries, while ratcheting up tariffs on Chinese imports,
On April 11, Beijing increased its tariffs on US imports to 125 per cent
“Tariffs could have a much more harmful impact than the removal of foreign aid,” Ms Coke-Hamilton said, warning that developing economies risk sliding back on the economic gains they made in recent years.
Some of the world’s least developed countries, including Lesotho, Cambodia, Laos, Madagascar and Myanmar, may look to improve regional trade relations to absorb the loss of some of the US market for their exports, the ITC said.
Bangladesh, the world’s second-largest apparel exporter, could lose US$3.3 billion (S$4.3 billion) in annual exports to the US by 2029 if the US tariff of 37 per cent stays after the pause, ITC data found. It may look to European markets as an alternative as they still hold growth potential, Coke-Hamilton suggested.
The projections by the International Trade Centre, the joint agency of the World Trade Organisation and the United Nations, which seeks to help countries develop through exports, are based on data it gathered before Mr Trump’s 90-day pause and subsequent hikes on duties on Chinese imports. REUTERS
