#TariffPause ⭐️
The Director of the United Nations' International Trade Centre said on Friday that comprehensive tariffs under U.S. President Donald Trump's administration and retaliatory measures could have a catastrophic effect on developing countries and cause them worse harm than a reduction in foreign aid.
According to the Centre, global trade could shrink by between 73% and global GDP could decline by 0.7%, with developing countries being the most affected.
Pamela Cook-Hamilton, the Executive Director of the International Trade Centre, said, "If this escalation continues between China and the United States, it will lead to an 80% decrease in trade between the two countries, and the ramifications could be catastrophic on all levels."
Global markets are still facing turmoil on Friday, following Trump's announcement of a 90-day suspension of tariffs on dozens of countries, while increasing tariffs on Chinese imports to effectively raise them to 145%.
Today, Beijing raised its tariffs on imports from the United States to 125% in a trade war that threatens to disrupt global supply chains.
Cook-Hamilton said, "Tariffs could have a much more damaging effect than cutting foreign aid," warning that developing economies face the risk of losing the economic gains they have made in recent years.
The International Trade Centre stated that some of the least developed countries in the world, such as Lesotho, Cambodia, Laos, Madagascar, and Myanmar, may seek to improve their regional trade relations to compensate for the loss of their exports as part of the U.S. market.
Data from the International Trade Centre indicated that Bangladesh, the world's second-largest clothing exporter, could lose $3.3 billion of its annual exports to the United States by 2029 if the 37% U.S. tariffs imposed on it continue after the suspension decision.
Cook-Hamilton indicated that she may look to European markets as an alternative, as those markets still have growth potential.
The International Trade Centre's forecasts are based on data collected before Trump's announcement of a 90-day suspension of tariffs and subsequent tariff increases on China.
The Centre is a joint agency between the World Trade Organization and the United Nations that aims to help countries grow through exports.
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