Impact of Tariffs on Developing Countries Could Be ‘Catastrophic,’ Warns UN Trade Agency
Geneva, Switzerland – April 11, 2025, 03:38 AM PDT – The United Nations trade agency has sounded the alarm on President Donald Trump’s sweeping tariff policies, cautioning that their impact on developing countries could be “catastrophic”—surpassing even the fallout from foreign aid cuts. Pamela Coke-Hamilton, executive director of the International Trade Centre (ITC), a joint agency of the UN and World Trade Organization, delivered the stark warning to Reuters on Friday, April 11, as global markets reel from Trump’s latest trade salvo: a 90-day tariff pause on over 75 nations paired with a punishing 145% effective rate on Chinese imports.
Coke-Hamilton’s assessment, echoed in ITC projections, paints a grim picture: global trade could shrink by 3-7% and world GDP by 0.7%, with developing economies bearing the brunt. “It is huge,” she said, spotlighting an escalating U.S.-China tariff war that threatens an 80% plunge in bilateral trade—a ripple effect that could devastate nations reliant on exports to the American market. Unlike aid cuts, which disrupt budgets, tariffs strike at the economic lifeline of trade-dependent countries, unraveling decades of growth. “Tariffs could have a much more harmful impact than the removal of foreign aid,” she warned, urging a rethink as nations like Bangladesh face a projected $3.3 billion export loss by 2029 under a 37% U.S. tariff.
The ITC’s data, gathered before Trump’s April 9 pause, underscores the peril for least-developed countries—Lesotho (50% tariff), Cambodia (49%), Laos (48%), Madagascar (47%), Myanmar (45%)—whose exports, from apparel to vanilla, lean heavily on U.S. consumers. Cambodia, for instance, sends 35% of its exports stateside, while Lesotho (27%) and Madagascar (18%) risk job losses in garment and commodity sectors. “These countries could slide back on economic gains,” Coke-Hamilton told Reuters, suggesting regional trade pivots—Bangladesh to Europe, Madagascar to Canada—as lifelines, though insufficient against a global downturn.
Trump’s policy, rooted in a February White House pledge to slap 25% tariffs on Canada and Mexico and 10% on China (now escalated), aims to curb migration and drug flows while boosting U.S. manufacturing. Yet, the ITC and UNCTAD’s Rebeca Grynspan, who on April 10 urged sparing the poorest nations, argue it’s a blunt tool pummeling vulnerable economies with negligible trade deficits—Madagascar’s vanilla exports, for example, barely register. Posts on X amplify the alarm: “Tariff wars could hurt developing nations more than aid cuts—global trade down 7%?” one user wrote, mirroring UN fears of a “new normal” of low growth and high debt.
As China vows retaliation and allies like Japan call it a “national crisis,” the UN’s plea for exemptions gains urgency. With markets jittery—the Dow dropped 1,000 points Thursday—and developing countries bracing for a trade shock, Coke-Hamilton’s warning rings clear: tariffs may protect one nation’s interests, but for the global south, they could spell collapse
