Shruti Kothari | Jaipur | Business Remedies. The global economy is bracing for a potential 3% contraction in trade volumes, attributed to the sweeping tariffs imposed by the United States, according to Pamela Coke-Hamilton, Executive Director of the International Trade Centre (ITC). This downturn could have catastrophic effects, particularly on developing nations.
Coke-Hamilton emphasized that the aggressive tariff measures, coupled with retaliatory actions from China, threaten to disrupt global supply chains and undermine economic progress in low-income countries. The ITC projects a decline in global trade by 3-7% and a reduction in world GDP by 0.7%, with developing nations bearing the brunt of the fallout. The apparel sector is notably vulnerable. For instance, Bangladesh, a major exporter of ready-made garments, could face an annual loss of $3.3 billion in exports to the U.S. by 2029 if the current 37% tariff persists. Other nations like Lesotho, Cambodia, Laos, Madagascar, and Myanmar are also at risk due to their reliance on textile exports. In response to these challenges, the ITC advises affected countries to strengthen regional trade ties and explore opportunities in European markets to mitigate the adverse impacts.
The World Trade Organization (WTO) has also expressed concern, warning that the new U.S. tariffs could reduce global merchandise trade volumes by around 1% in 2025.
WTO Director-General Ngozi Okonjo-Iweala highlighted the risk of escalating trade wars and the potential for retaliatory measures that could further depress global trade. As nations navigate these turbulent times, the emphasis is on fostering international cooperation and adopting policies that promote trade diversification and resilience.
