UN body warns of ‘catastrophic’ impact of US-China trade war on developing countries
The executive director of the International Trade Centre stated that the tariffs being levied by US and China could cause the global GDP to suffer as well.
The executive director of the International Trade Centre stated that the 'tit-for-tat' tariffs between US and China could have a devastating impact on developing countries.
Pamela Coke Hamilton, who is the head of the joint agency of the United Nations and World Trade Organisations, stated that the ongoing trade war and escalation of tariffs could spell trouble even worse the cuts to foreign aid.
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“It is huge. If this escalation between China and the U.S. 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 said.
"Tariffs could have a much more harmful impact than the removal of foreign aid," Coke-Hamilton warned, as developing nations could bear the brunt of the economic losses spurred by the ongoing trade war.
Also Read: Xi Jinping's first reaction as Donald Trump slaps 145% tariffs on China: '...unilateral bullying'
The International Trade Centre also estimated that global trade could shrink 3-7 per cent, and the global GDP could slide 0.7 per cent, with developing countries being the worst affected.
Citing the example of textile exports from Bangladesh, she stated that US tariffs of 37 per cent could lead to $3.3 billion in economic losses for the country, as per ITC estimates.
Also Read: China hits back with 125% additional tariffs on US goods in tit-for-tat move
These estimates are based on data collected by the trade body but do not reflect the 125 per cent tariffs imposed by the US, the 90-day levy pause, or the 145 per cent counter-tariffs introduced by China.
Developing countries affected
After facing an economic meltdown, and attempting to revitalise their economy, uncertainty plagues the Sri Lankan markets after President Donald Trump levied a 44 per cent tariff on their goods.
The US is Sri Lanka's largest single market, accounting for almost a quarter of its $12 billion in merchandise exports.
"Mauritius, Madagascar, Lesotho, South Africa in particular will be impacted," stated the director of the Africa programme at the Chatham House think-tank, Alex Vines, as quoted by AFP.
Further, several countries in Africa could be undermined if the Trump administration decided to terminate the African Growth and Opportunity Act (AGOA), which is up for review in September.
More than 75 countries have appealed to the US to negotiate more favourable deals after the tariff announcements as per President Trump.
"When the two main global economies impose tariffs, it will affect everybody, not only the economies engaged in the tariff war," Rebeca Grynspan, head of the United Nations Conference on Trade and Development (UNCTAD), said during an interview with UN News.
