Ongoing trade tensions between the United States and China may have a severe impact on developing economies, prompting the United Nations to advise Bangladesh to shift its garment exports toward the European market.
Trade conflicts triggered by the United States under President Donald Trump and retaliatory tariffs from other countries could have a devastating impact on developing nations, the United Nations warned on Friday. According to the UN’s trade agency, such actions may have even more harmful effects than a reduction in foreign aid.
The International Trade Centre (ITC) reported that global trade could shrink by 3–7%, and global GDP may fall by 0.7%, with developing countries bearing the brunt of the impact.
As the world’s second-largest exporter of ready-made garments, Bangladesh stands at risk. In light of potential losses in the US market, the UN trade agency has advised Bangladesh to enhance its presence in European markets, where growth potential still exists.
Pamela Coke-Hamilton, Executive Director of the ITC, told Reuters, “This is significant. If the US-China tension continues, their bilateral trade could drop by up to 80%, creating a ripple effect that could destabilize global supply chains.”
On Friday, President Trump announced a 90-day suspension of tariffs on countries other than China but simultaneously raised effective tariffs on Chinese imports to as high as 145%. In retaliation, Beijing imposed tariffs of up to 125% on US goods. The escalation signals a deepening trade war between the two economic giants, with far-reaching global consequences.
Coke-Hamilton emphasized that tariffs could be more damaging than cutting foreign aid, warning that developing countries could lose years of economic progress if the trade war continues.
The ITC pointed out that several least-developed countries—including Lesotho, Cambodia, Laos, Madagascar, and Myanmar—may try to strengthen regional trade ties to compensate for lost US market access.
According to ITC projections, if the proposed 37% tariff remains after Trump’s suspension period ends, Bangladesh could lose up to $3.3 billion in annual garment exports to the US by 2029.
As a precaution, Coke-Hamilton suggested that Bangladesh should consider the European Union as a strategic alternative, where market opportunities remain promising.
Liberty News’ economic correspondent states that the forecast by the ITC and WTO is based on existing data before Trump’s latest suspension announcement and China’s retaliatory measures. Experts fear the trade war may have long-term and severe consequences for the economies of developing countries.
LND/BG
