A global trade war, has been reignited by U.S. protectionism, fractures supply chains, threatening macroeconomic stability and economic justice. On May 14, the U.S. and China cut tariffs from 145% to 30% and 125% to 32.6%, per PIIE, yet Trump's proposed 20% EU and 27% India tariffs loom, per Reuters. With 47 WTO disputes filed in 2025, per WTO, trade barriers imperil $33 trillion in global commerce, per UNCTAD. It's hence essential to analyse the trade war's havoc, urging multilateral resilience to shield 1.2 billion living on under $5 daily, per World Bank.
Tariff Shockwaves: Global Trade Unraveled
Trump's tariffs, averaging 15.6% a century-high, per Wikipedia have slashed global trade by $500 billion, per UNCTAD. China's U.S. exports fell from $438.9 billion to $200 billion, rerouting via ASEAN, with Vietnam's U.S. exports surging 15%, per CEPR. The EU, facing 20% levies, saw exports drop 8%, per Eurostat, while its 25% retaliatory tariffs hit $330 billion in U.S. goods, per Tax Foundation. The IMF's 2025 forecast cuts global growth to 2.8% from 3.3%, with a 60% recession risk, per JPMorgan. "Protectionism is a global growth killer," warns WTO's Ngozi Okonjo-Iweala, per Bloomberg.
India's Economic Gauntlet: Balancing Trade and Resilience
India, stung by 27% U.S. tariffs, faces a $10 billion export loss, per The Hindu, with textiles and IT services losing 0.5% GDP, per Kotak Institutional Equities. The rupee, at ₹86.50/USD, per Groww, fuels 4% inflation, per RBI's June 2025 outlook. Yet, India's $500 billion U.S. trade goal by 2030, per CNBC, and 4% export growth to ASEAN via new FTAs, per Mint, signal resilience. "Tariffs test our adaptability, but India will thrive," says Commerce Minister Piyush Goyal, per Business Standard, as India inks a $100 billion EU trade deal, per Reuters.
Global South's Plight: Inequity Amplified
The Global South suffers acutely, with ASEAN's 49% tariff threat stifling industrialization, per World Economic Forum. Africa's $5 billion export losses, 70% from raw materials, entrench SDG 9's industry goals, per UN. India's textile sector, 60% female workers, risks 200,000 jobs, per ILO, deepening gender inequity. "Tariffs widen the chasm of poverty," warns IMF's Kristalina Georgieva, per Reuters. Sub-Saharan GDP growth, at 3.6%, faces a 0.4% cut, per AfDB, as 68% of Global South nations decry Western bias, per Afrobarometer.
The Retaliation Spiral: A Lose-Lose Game
China's 32.6% tariffs on U.S. goods, per PIIE, and Canada's 25% levies on $20 billion U.S. exports, per Wikipedia, escalate tensions. U.S. households face $1,183 annual cost hikes, with iPhones nearing $2,300, per Reuters. CEPR's simulations show a 2% U.S. welfare loss, doubling under full retaliation. "Trade wars yield no victors, only shared losses," says EU's Ursula von der Leyen, per NYT. WTO disputes, up 30% in 2025, signal a collapsing trade order, per WTO.
A Path to Resilience: Multilateral Redemption
The G20's 2025 summit must forge a $1 trillion trade stabilization fund, per UNCTAD, to curb volatility. India's EU trade pact and ASEAN's China pivot, per Reuters, offer models. The WTO's 164 members must reform tariff escalation, cutting barriers by 10%, per UNCTAD, empowering developing nations. "Global cooperation is our lifeline," urges India's Business Standard.
Reclaiming Shared Prosperity: A Global Imperative
Global trade, at $33 trillion in 2024, teeters under protectionism's weight. A G20-led tariff truce could save $500 billion, shielding 1.2 billion from inflation's grip, per World Bank. This crisis demands a global conscience, rooted in equity, to rebuild a just economic order, ensuring shared prosperity for all.
[Major General Dr Dilawar Singh is an Indian Army veteran who has led the Indian Army's Financial Management, training and research divisions introducing numerous initiatives therein. He is the Senior Vice President of the Global Economist Forum AO ECOSOC, United Nations and The Co President of the Global Development Bank.]
