BY THE time Washington and Beijing released their latest joint statement on May 12 — ostensibly pressing pause on a spiralling tariff war — much of the world exhaled in cautious relief. But beneath the performative diplomacy and sterile communiqués, a quieter suffering has gone largely unheard. For the world’s most vulnerable economies, the damage is neither paused nor negotiable. It is metastasising.
At the centre of the storm lies the United States’ renewed enthusiasm for tariffs — an economic instrument once discarded by the apostles of neoliberal globalization, now being redeployed with almost missionary zeal. The United Nations Conference on Trade and Development has sounded the alarm: America’s recent wave of tariff hikes, far from being a targeted effort to recalibrate great-power competition, threatens to rupture the already fragile prospects of the least developed countries and small island states.
Rebecca Greenspan, the head of United Nations Conference on Trade and Development, has put it bluntly: the poorest nations on earth — those who have played little to no role in ballooning the US trade deficit — should be exempt. Her case is unimpeachable. The 44 least developed countries contribute less than 2 per cent to America’s trade imbalance. Their exports are, in most cases, inconsequential in value and unthreatening in scope. Take Madagascar, whose prized export is vanilla. Punitive tariffs on such economies amount not to economic policy, but economic vandalism.
But the ideology of economic nationalism, like its military counterpart, rarely pauses to interrogate the collateral damage. The numbers speak with a clarity that policymakers prefer to ignore. According to United Nations Conference on Trade and Development, vulnerable economies currently account for just 0.3 per cent of the US trade deficit. Yet in the next round of planned tariff escalations — set to take effect by July 2025 — some of these very nations are slated to face rates exceeding 25 per cent. Seven of them are LDCs. Many are in Asia and the Pacific, regions already groaning under the triple burden of climate crisis, debt overload and post-pandemic recovery.
Even the arithmetic of injustice is startling. In April alone, the average US tariff on LDCs in Asia and Oceania doubled, with projections suggesting it may triple by July. Tariffs on Latin American and Caribbean nations have surged more than 40-fold. The worst hit? Agriculture and textiles — the sectors that not only anchor these economies but also employ the largest swath of their working populations.
One might ask, what rationale underpins this? Officially, Washington claims it is ‘protecting domestic industries.’
But in practice, it resembles an exquisitely precise sniper attack on economies too weak to retaliate. These are not the high-tech sectors threatening Silicon Valley’s dominance. They are the labour-intensive, low-margin industries that are the difference between subsistence and survival for millions.
Nowhere is the contradiction more grotesque than in America’s expectations from the very nations it punishes. As Washington tightens its own trade borders, it insists that others dismantle theirs. The asymmetry is breathtaking.
This hypocrisy is neither accidental nor new. As Joseph Stiglitz — one of the few economists in the West willing to pierce the veil — once observed, ‘Those who build walls will eventually be surrounded by them.’ That moment may be closer than many in Washington dare admit.
The backlash is already underway. Developing countries are turning away from the dollar, forming new trade blocs and exploring alternatives to Bretton Woods institutions. The expansion of BRICS to include 45 countries is not merely a diplomatic manoeuvre; it is a symptom of a deeper malaise. The edifice of post-war economic order, built on US hegemony and free-market orthodoxy, is visibly cracking.
None of this is unfamiliar. America has been here before — most famously in 1930, with the Smoot-Hawley Tariff Act. That infamous legislation turned a stock market crash into a global depression. Markets shrank, trade collapsed and beggar-thy-neighbour became the default mode of international relations. The parallels with the present are chilling.
Already, small US businesses are warning of spiralling costs for imported parts. Soybeans lie rotting in Midwestern silos as global buyers turn elsewhere. Even the International Monetary Fund now projects the US as the slowest-growing economy in the developed world. The irony is almost biblical: in trying to weaponise trade, Washington is gradually wounding itself.
The tragedy, however, lies not in America’s self-inflicted harm but in the suffering it outsources. The textile workers in Phnom Penh, the cassava farmers in Malawi, the vanilla growers in Antananarivo — these are not collateral damage. They are deliberate victims of a policy that refuses to acknowledge their humanity.
Economic warfare, like its military cousin, often hides its blood. There are no explosions on electronic media, no satellite imagery of ruined cities. But the wreckage is real: shuttered factories, malnourished children, political instability. And it is happening not in battlegrounds of ideology, but in the quiet hinterlands of a system that has long treated the global South as expendable.
If there is an alternative, it lies in the resuscitation of inclusive multilateralism — one that listens as well as lectures, that redistributes as well as reforms.Ìý It must be demanded, built, and led by the very countries that have borne the brunt of an unjust order. Washington’s tariff tantrum is not merely a failure of policy — it is a moral failure. And as the global South begins to reclaim its voice, the question confronting the North is no longer how to lead, but whether it is willing to share.
In a world inching toward polycentric power, the choice is no longer between open markets and protectionism. It is between economic justice and continued imperialism. The sooner we recognise this, the fewer casualties there will be.
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Dr Imran Khalid is a freelance contributor from Karachi.
