The Global South will pay for Trump’s trade war

US President Donald Trump’s sweeping tariffs have unleashed economic chaos, roiling stock and bond markets and triggering panic around the world, especially in lower income countries that rely heavily on exports to the United States. The result could be an entirely manufactured global recession, with the developing world bearing the brunt.

- BY JAYATI GHOSH

The brief calm in financial markets following Trump’s abrupt announcement of a 90-day “pause” on most of his “reciprocal” tariffs—excluding those on Chinese imports, which he raised to 145 percent last time, willing “has proven premature.” While some billionaires and traders may have made a killing by correctly interpreting Trump’s social media posts ahead of his sudden policy reversal, the disruptions to global trade and finance caused by his tariffs continue to pose serious risks.

Moreover, despite the pause on some tariffs, a universal 10 percent tariff on all US imports remains in effect, along with sector-specific tariffs of 25 percent on steel, aluminum, automobiles, and auto parts. There are new exemptions for smartphones, computers, and other electronic devices, even as Trump has also threatened new duties on pharmaceuticals, semiconductors, copper, and lumber. Taken together, these measures will reduce the availability of imported goods, raise prices for US consumers, and impose steep costs on exporting countries.

But, ultimately, the tariffs imposed on each country will depend on future negotiations, where the US is expected to play hardball. Trump has already made clear his disdain for foreign leaders, boasting that many were “kissing my ass” and willing to “do anything” to reverse the tariffs. As a result, the final scope of Trump’s tariffs remains uncertain.