GENEVA, April 12 (WSH) — Global trade could shrink by three per cent following the United States’ new tariff measures, a senior United Nations economist warned on Friday.
Pamela Coke-Hamilton, Executive Director of the International Trade Centre (ITC), said the new US actions would likely trigger shifts in supply chains, reassessments of global alliances, and both geopolitical and economic realignments.
“There will be shifting in supply chains, reassessment of global alliances, and geopolitical and economic shifts as well,” Coke-Hamilton emphasized, following the White House’s announcement of a 90-day pause on “reciprocal tariffs” for most countries — except China.
China Hit Hardest by Tariffs
Under the new measures, tariffs on imports from most countries are reduced to 10 per cent, still considered high. However, tariffs on Chinese imports remain at a steep 145 per cent. In response, China has raised tariffs on US exports to 125 per cent.
Countries like Mexico, China, Thailand, and several southern African nations, alongside the US itself, are among those most affected by the escalating trade tensions, Coke-Hamilton noted.
Emerging Trade Shifts and Regional Opportunities
The ITC chief explained that Mexico’s export patterns had already begun to shift away from traditional markets such as the US, China, Europe, and Latin America. Mexican products have made modest gains in Canada, Brazil, and to a lesser extent, India.
Similarly, Vietnam has redirected exports away from the US, Mexico, and China, instead strengthening trade ties with the European Union, Republic of Korea, and others. Coke-Hamilton highlighted that while this realignment presents opportunities, it also poses challenges for developing economies.
Vulnerable Economies at Greater Risk
Developing countries, lacking manufacturing diversity and value-added capabilities, are particularly vulnerable to global trade instability. Among the most exposed to the ongoing disruptions are Lesotho, Cambodia, Lao PDR, Madagascar, and Myanmar, according to the ITC chief.
Warning Over Prolonged Uncertainty
Coke-Hamilton also confirmed that the World Trade Organization (WTO) estimates commerce between China and the US could decline by up to 80 per cent if current tensions persist. However, she stressed that China-US trade constitutes only about three to four per cent of total global trade, meaning 96 per cent of trade remains unaffected.
Despite this, she warned that the ongoing uncertainty surrounding the 90-day tariff extension is harmful to global commerce.
“The lack of stability and predictability will affect trade, firms, and real-time decision-making,” Coke-Hamilton said, adding that today’s economic tremors could be harsher and more turbulent than those seen in the past 50 years.
(Source: UN News)
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