Global South will pay for trade war

S 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.

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The result could be an entirely manufactured global recession, with the developing world bearing the brunt.

The brief calm in financial markets following Mr 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% — has proven premature. While some billionaires and loyalists may have made a Killing by correctly interpreting Mr 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% tariff on all US imports remains in effect, along with sector-specific tariffs of 25% on steel, aluminium, automobiles and auto parts. There are new exemptions for smart-phones, computers and other electronic devices, even as Mr 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. Mr 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 Mr Trump's tariffs remains uncertain.