Trump’s Tariffs Reshape Global Trade, Boost India and Brazil
Trump’s aggressive tariff policies may shrink global trade by 3%, redirecting exports from China and the US to India and Brazil.,
Trump’s Tariffs May Shrink Global Trade and Reshape Export Routes
As the United States escalates its tariff war under Donald Trump’s leadership, ripples across global markets are becoming more pronounced. A senior United Nations official has warned that these aggressive trade policies could shrink international trade by 3%, redirecting export flows from economic heavyweights like the US and China to rising markets such as India, Brazil, and Canada.
Pamela Coke-Hamilton, Executive Director of the International Trade Centre, highlighted the long-term economic implications of the tariff escalation during a recent briefing in Geneva. She emphasized that this trade shift isn’t just a temporary tremor but a tectonic movement that could redefine global commerce for years to come.
Emerging Economies Rise Amid Trade Turbulence
Coke-Hamilton noted that Mexico, traditionally a major exporter to the US and China, is seeing its trade routes realigned. While Mexican exports have been significantly hit, modest gains are emerging in trade with Canada, Brazil, and India. This transition signals a broader trend where developing countries may seize new opportunities amid the shifting economic tides.
India and Brazil, in particular, appear poised to benefit from the diversion of trade routes. These nations are not just passive recipients of redirected exports—they’re actively reconfiguring their supply chains, attracting foreign investment, and positioning themselves as resilient players in the evolving trade landscape.
The Apparel Industry Faces High-Stakes Pressure
The consequences are especially stark for the global apparel industry. Bangladesh, the world’s second-largest garment exporter, faces the risk of a 37% reciprocal tariff on US-bound exports. According to Coke-Hamilton, this could cut Bangladesh’s annual US exports by up to $3.3 billion by 2029.
Given that textiles and garments are vital to employment and GDP in many developing nations, such trade barriers could destabilize key economies. To withstand such blows, countries must pivot toward long-term strategies like value-added production, diversification, and regional trade integration.
A Global Rewiring of Supply Chains
Recent tariffs announced by the US include a staggering 145% levy on Chinese imports. Although a 90-day reprieve has been extended to most nations, China is not among them. In retaliation, Beijing imposed a 125% tariff on American goods—deepening the standoff and accelerating a global reordering of supply chains.
Vietnam, another export-driven economy, is feeling the squeeze. Its trade is gradually shifting away from traditional partners like the US and China and finding new buyers in Europe, South Korea, and the MENA region. This realignment reflects a broader movement among countries seeking to insulate themselves from trade volatility.
Modeling the Long-Term Fallout
Preliminary models developed with CEPII, a French economics think tank, reveal sobering projections. Even before the latest tariff announcements, global GDP was projected to fall by 0.7% by 2040 due to these trade disruptions. Countries like Mexico, Thailand, China, and the US are likely to bear the brunt.
These figures underscore the fragile interconnectedness of today’s global economy—where one nation’s policy shift can reverberate across continents and decades.
China’s Counterstrategy: Outlast, Not Outfight
While Washington doubles down on protectionism, Beijing is playing a different game. Former US diplomat Daniel Russel suggests that China isn’t trying to “win” the trade war outright. Instead, it aims to endure it by deepening regional partnerships, particularly in Southeast Asia, and strengthening diplomatic influence.
“By signaling that it will ignore future US tariffs, China is betting that the US market response will eventually force a rethink,” Russel said. “This is about strategic patience, not escalation.”
New Opportunities in Uncertainty
Despite the chaos, experts believe there’s a silver lining for developing economies. Coke-Hamilton emphasized that these nations can thrive amid uncertainty—if they prepare strategically. Strengthening infrastructure, fostering regional integration, and investing in higher-value industries can turn short-term volatility into long-term gains.
In this new reality, the global economic order may no longer be dictated solely by superpowers. Instead, a multipolar trade landscape could emerge, where nations like India and Brazil play pivotal roles in stabilizing and reshaping the future of international commerce.
Conclusion:
As the tariff tug-of-war between the US and China intensifies, the ripple effects are redrawing the global trade map. While major economies brace for impact, emerging markets like India and Brazil are stepping into new roles with renewed vigor. The challenge now lies in whether these nations can leverage this moment into sustainable growth—or become the next casualties of a trade war they didn’t start.
Disclaimer:
This article is for informational purposes only and reflects publicly available data and expert opinions. It does not constitute financial or trade advice. Readers are encouraged to consult professionals before making decisions based on international trade developments.
source : The Times of India