Trump’s tariff war will spare none, from advanced economies to Asia’s developing countries

The world has witnessed a resurgence of protectionism since Donald Trump returned to the White House. So-called “reciprocal” tariffs, imposed on all US trading partners at varying degrees based on the tax they charge on American goods, have been one of the hallmark features of Trump’s economic policy. They aim to correct what he perceives as “unfair” trade practices.

In early April, Trump said many countries had “ripped us off left and right” and declared “now it’s our turn to do the ripping”. His administration swiftly imposed sweeping tariff increases, with some of the highest rates falling on poorer countries like Laos and Lesotho.

A 90-day suspension was eventually made for most of these tariffs, and Trump has now softened duties on imported cars and car parts. But the danger remains high. No one can be certain that the initial reciprocal tariffs will not be reinstated.

Developing countries, many of which rely heavily on the export of manufactured goods to the US, will be keeping a keen eye on what happens next.

We employed the Global Trade Analysis Project model to analyse the possible effects of US tariffs on trade and economic growth. The model captures interactions and feedback among economic agents (households, firms and governments), markets, sectors and regions in the world economy.

It can be used to forecast...

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