Sat Apr 12 05:20:26 UTC 2025: **UN Warns of Global Trade Shrinkage Amidst US-China Tariff War**

Geneva, April 12, 2025 — A top United Nations economist has warned that global trade could shrink by three percent due to escalating tariffs imposed by the United States. Pamela Coke-Hamilton, Executive Director of the International Trade Centre, stated on Friday that these tariffs, particularly those targeting China, will cause significant long-term shifts in trade patterns and economic integration.

Coke-Hamilton highlighted that countries like Mexico and Vietnam are already redirecting exports away from the US and China towards markets such as Canada, Brazil, and the Middle East. She emphasized the severe impact on developing nations, citing the potential loss of $3.3 billion in annual Bangladeshi apparel exports to the US by 2029 if reciprocal tariffs are fully implemented. She advocated for diversification, value addition, and regional integration to help developing countries navigate these economic shocks.

Initial estimates suggest that by 2040, the cumulative effects of the tariffs could reduce global GDP by 0.7 percent. Countries like Mexico, China, Thailand, and those in Southern Africa are expected to be hardest hit, along with the United States itself.

The situation is further complicated by China’s decision to impose 125% tariffs on US imports. Wendy Cutler, Vice President and Managing Director of the Asia Society Policy Institute, believes that China is prepared for a prolonged trade war, possessing additional tools beyond tariffs to leverage. She indicated that the current high tariffs effectively halt goods trade between the US and China.

Daniel Russel, Vice President of International Security and Diplomacy at ASPI, suggested that Chinese President Xi Jinping is not seeking to escalate the conflict but rather to outlast the US President’s trade policies, focusing on long-term strategic advantage and strengthening alliances within the region. He pointed to President Xi’s recent Southeast Asia tour as evidence of this strategy. The long-term impact of this trade war and the ultimate resolution remain uncertain.

Read More