Why Trump's Tariffs Hit Poor Countries With Higher Rates Than Rich Ones

The tariff policies of Donald Trump‘s administration have been found to disproportionately affect less affluent nations, a stark contrast to the special trading privileges these countries have enjoyed for years from wealthy nations like the U.S.

What Happened: The Trump administration’s tariffs have been more severe on poorer nations compared to their wealthier counterparts.

While affluent nations such as South Korea, Japan, and European Union member states faced tariffs ranging from 10% to 15%, developing countries like Vietnam, Bangladesh, South Africa, and Iraq were slapped with tariffs of 20% or more.

Further, Myanmar and Laos, among the poorest nations in Asia, were subjected to tariffs as high as 40%, threatening to cripple their exports to the U.S.

In a recent development, President Trump announced plans to hike tariffs on India to 50%, amidst disputes over India’s continued imports of Russian oil.

"It's left developing countries with very high tariffs. It's a significant change especially for treatment of least developed countries," Deborah Elms, head of trade policy at the Hinrich Foundation, an Asia-based think tank recently told the Wall Street Journal.

Also Read: Trump’s Disapproval Rating Soars Amid Economic Woes, Epstein Drama

However, countries with significant geopolitical or economic ties to the U.S., such as Saudi Arabia, Qatar, and the United Arab Emirates, were spared from these harsh tariffs. These nations, all major oil and gas producers, faced no tariffs higher than the standard 10%.

“It is hard to tell if there is any logic to deciphering why some countries have been hit so hard while others were spared,” David Henig, a trade expert at the European Center for International Political Economy, a think tank based in Brussels, told CNBC.

Why It Matters: This shift in tariff policy marks a significant departure from the traditional treatment of the world’s least developed countries.

The demand from the Trump administration for trading partners to invest in the U.S. has put developing countries at a disadvantage, as few have the financial capacity to match the investment pledges made by Japan, South Korea, and the EU.

This could potentially exacerbate the economic divide between developed and developing nations, further straining international trade relations.

Read Next

Six Months In, Trump Struggles To Sell His Economic Vision To Skeptical Americans