By Dan Steinbock
With its misguided tariff wars, the Trump administration is not only disrupting historical trade ties with the world’s largest economies, but waging war against economic development in the Global South.
After agreeing to suspend the “reciprocal” duties for 90 days — till early July — Trump threatened to set country-specific tariff rates. By making good his promise and imposing unilateral tariffs on imports from the US’ trading partners, Trump will severely disrupt export-led growth, which has fueled global growth for years, and shatter the development dreams and aspirations of emerging and developing economies.
China’s global trade engine is a case in point.
$3.6 trillion of exports to 230 countries
In 2024, US exports amounted to some $2.1 trillion. That’s significantly more than those by Germany ($1.7 tr) or the Netherlands ($0.7 tr), Europe’s two largest trading economies. Yet, today the value of US exports is less than 60% of those by China that amount to $3.6 trillion. Today, China contributes some 15% of all exports worldwide. That’s twice as much as the US (Figure 1).
Figure 1 China’s export partners worldwide
Source: Latest data (for 2024), ITC, June 2025
China’s exports have some 230 destinations. Most go to major economies in North America (US, Mexico, Canada), Western Europe (Germany, Netherlands, UK), East Asia (Japan, South Korea, Taiwan), Southeast Asia (Vietnam, Malaysia, Thailand), India, Russia and Australia.
In 2018, before the first Trump administration’s tariff wars, the United States still accounted for over 19% of China’s total exports. In 2024, that figure was barely 16%; that is, less than Chinese exports to Europe and Southeast Asia, each. Ever since the US tariff wars, China has diversified its exports away from the US.
In the past decade, this trend has been greatly reinforced by Chinese trade with Belt and Road Initiative (BRI) countries. Nearly 54% of China’s imports came from BRI partner countries last year, with China’s huge marketplace providing development opportunities for nations around the world.
China’s trade is vital to the emerging and developing economies of the Global South, where the West’s exports often are prohibitively expensive. The West exports mainly to economies that share similar high living standards. Such trade is predicated on high purchasing power, which is the privilege of high-income economies.
Trump’s war against economic development
The first round of Trump tariffs built on traditional trade wars focusing mainly on Canada, Mexico and China. The second round began with “reciprocal tariffs”, which actually are unilateral, flawed as stated and mistakenly calculated. Those tariffs were followed by a slate of retaliatory tariffs.
The net effect has been a stunning downgrading of the economic prospects in the United States, its trading partners and the global economy. What is less understood is the likely long-term effect of Trump’s unilateral tariffs, which is to undermine the rise of the Global South.
The US administration’s original list of these tariff targets comprised almost 60 countries and regions. Except for the EU as a bloc and a few high-income countries, three of four of these targets represent emerging and developing economies; that is, the Global South. The Trump administration is at war against their economic development (Figure 2).
Figure 2 Trump administration’s unilateral tariffs
Source: White House
Since the late 20th century, most economies that have been able to industrialize and catch-up with the advanced economies of the West have done so on the back of export-led growth. It is what fueled the rise of Asian tigers in the postwar era (Hong Kong, Singapore, South Korea, Taiwan), their subsequent successors (Malaysia, Thailand, Vietnam, Indonesia).
They were followed by China – and today India and some Southeast Asian economies.
From Western domination to multipolarity
After World War II, the United States dominated half of the world economy. It was the “world’s factory,” the largest manufacturer and exporter. As the largest creditor, it also held huge leverage over the international economy. This dominance, in turn, was reflected by the mighty US dollar that had a virtual monopoly in international transactions.
All that is history today.
Of course, the United States remains the largest single economy in the world, but its relative share has shrunk to about a fourth or fifth of the world GDP. It hasn’t been the world’s largest export manufacturer since the postwar era. Starting in the 1970s, it has suffered from trade deficits and today it is the world’s largest debtor. Concurrently, the share of US dollar in international transactions has shrunk to less than 60%.
In the process, Washington has played itself into a dark corner: it cannot fully decouple from China without major economic turmoil. But thanks to its tariffs, it cannot any longer benefit from China’s affordable prices, which has long contributed to low inflation in the US.
Today any major threat to undermine Chinese trade poses a $6.2 trillion threat – that is, export plus imports combined – to its trading partners, particularly the Global South and the world at large.
About the Author:
Dr. Dan Steinbock is an internationally recognized strategist of the multipolar world and the founder of Difference Group. He has served at the India, China and America Institute (USA), Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more, see https://www.differencegroup.net
The original version was published by China Daily on June 20, 2025
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