Global Trade Faces Turbulence: A New Era of Economic Realignment

Global trade may shrink by 3% due to tariffs by the US, with exports shifting from traditional markets like the US and China toward India, Canada, and Brazil, warns UN economist Pamela Coke-Hamilton. Developing countries must prioritize diversification, value addition, and regional integration to adapt.

Global trade faces the possibility of shrinking by 3% as the United States imposes significant tariffs, leading to a shift in exports from major economies like the US and China towards emerging markets such as India, Canada, and Brazil. The White House recently announced a 90-day pause on 'reciprocal tariffs' for most nations, excluding China, which responded with a 125% tariff on US imports.

International Trade Centre Executive Director Pamela Coke-Hamilton highlighted that countries like Mexico, Vietnam, and Bangladesh are witnessing major changes in their export markets, with increasing trade towards Canada, the EU, and the Middle East. She emphasized the need for developing countries to focus on diversification, value addition, and regional integration to minimize the impact of global economic shocks.

With retaliatory tariffs at 145% for Chinese imports and 125% for US imports, the world's two largest economies are experiencing drastically diminished trade. Experts indicate that both Washington and Beijing need to re-engage to manage the deteriorating trade situation, while China adopts long-term strategic measures to buffer its economy and expand diplomatic influence.

(With inputs from agencies.)