^{Photo / Jean-Marc Ferré}

Trade War Fallout: The World's Poor Pay the Price

Geneva, April 4, 2025 – The United Nations has issued a sobering warning about the human cost of rising global trade tariffs, stating that escalating trade conflicts risk devastating the world’s poorest and most vulnerable populations.

In a pointed statement, Rebeca Grynspan, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), cautioned that the ripple effects of aggressive tariff policies will disproportionately impact low-income households and developing economies already grappling with inflation, food insecurity, and economic instability.

“Trade should be a vehicle for growth and inclusion, not a source of chaos and inequality,” Grynspan emphasized. “When the rules of global trade are shaken, it’s the poorest nations and people who bear the brunt.”

Triggered by U.S. Tariffs, Global Shockwaves Spread

The UN’s strong statement follows President Donald Trump’s latest move to impose sweeping import duties on goods from multiple nations. The tariffs span over $60 billion in imports, targeting a range of industries including steel, electronics, and textiles. In response, China retaliated with tariffs on $45 billion worth of American goods, fueling fears of a global tit-for-tat trade war.

This latest round of tariffs affects more than just macroeconomic indicators. According to the World Bank, every 1% increase in tariffs can result in a 0.6% drop in GDP in low-income countries due to export contraction, rising consumer prices, and disrupted supply chains.

How Tariffs Hit the Poor Hardest

While tariffs are often pitched as protective tools for domestic industries, the economic burden often falls squarely on consumers—especially those already struggling to make ends meet.

Here’s how rising tariffs disproportionately hurt the poor:

• Increased Prices on Basic Goods: Tariffs raise the cost of imported items, including essentials like food, clothing, and medicine.
• Job Losses in Export-Dependent Sectors: Workers in countries that rely heavily on exports, especially in agriculture and textiles, face layoffs as demand slows.
• Weakened Social Services: Developing nations often fund public services through trade taxes. Reduced trade revenue = reduced investment in health, education, and infrastructure.

The International Labour Organization (ILO) estimates that tariff-induced slowdowns could put over 30 million jobs at risk in emerging economies by 2026 if protectionist trends continue.

Call for Global Cooperation and Policy Reform

UNCTAD’s Grynspan called on global leaders to choose diplomacy and reform over isolation and confrontation.

“This is a time for cooperation—not escalation,” she stated. “We need predictable, fair, and inclusive trade rules that put people at the center, not political agendas.”

Trade rules, she argued, must evolve in a way that preserves multilateralism, supports sustainable development, and avoids unpredictable disruptions that could push millions back into poverty.

The UN’s Sustainable Development Goals (SDGs), particularly the targets on poverty eradication (Goal 1), decent work (Goal 8), and reduced inequality (Goal 10), could be severely undermined by prolonged trade conflicts.

Historical Lessons and the Path Ahead

Economists have drawn parallels to the 1930s Smoot-Hawley Tariff Act, widely blamed for deepening the Great Depression. The World Trade Organization (WTO) has also expressed concern, warning that 2024 saw the highest number of trade disputes since 2008, a sign of growing fragmentation in global commerce.

UNCTAD and other organizations urge nations to reinvest in multilateral dialogue, revive the WTO’s dispute resolution system, and establish trade policies that balance national interests with global equity.

Final Takeaway

As global powers play economic chess with tariffs and trade barriers, it’s not corporations or politicians who suffer the most—it’s the factory worker in Bangladesh, the farmer in Kenya, or the single mother in rural America. The UN’s message is clear: trade must return to its roots as a force for progress, not poverty.

‍