Strategies for the Global South to Counter Protectionism » Capital News

The future of global trade is increasingly tied to the Global South, as emerging economies now control a substantial portion of the world market, with 85 percent of the global population. However, recent tariffs imposed by President Donald Trump could significantly hinder the economies of these nations.

Leaders from Global South countries must raise their voices on the global stage regarding the impact of tariffs, which are causing economic disruptions that disproportionately affect these nations. Their economies are heavily dependent on international trade, making them particularly vulnerable to the effects of trade wars.

Unlike countries in the North-North sphere, nations in the Global South have always been susceptible to the consequences of trade wars, whether directly or indirectly. It would be simplistic to assume that only the countries directly affected by tariffs and quotas in the Global South will face consequences. Global economic interdependence means that protectionism ultimately undermines the economies it aims to protect. In today’s interconnected world, isolating one nation or region often harms others and can destabilize the global economy. The ongoing U.S.-China tariff conflict is a reminder of the importance of cooperation over confrontation in the global economic landscape.

Developing nations, especially in Africa, are the most vulnerable to the fallout from this trade conflict. While U.S. protectionist policies may aim to benefit the domestic economy, they often end up hurting both the U.S. and weaker economies that rely on global trade, such as those in Africa. A trade war between the world’s largest economies could trigger ripple effects that harm nations with weaker financial systems, including those in Africa.

The tariffs already imposed, alongside rising tensions between the United States and European Union over Trump’s actions regarding Greenland and his relationship with Russian President Vladimir Putin over the Moscow-Ukraine war, have caused many investors to slow down on international business. These protectionist policies are fragmenting the global order, leading to uncertainty in the international market.

For Global South economies, which are driven largely by exports of raw materials, disruptions to global supply chains hit hardest. Many of these countries lack the capacity to engage in high-value-added industries, making them the largest casualties of these trade wars. To mitigate these shocks, it is essential for them to find ways to shield their economies.

Continued reliance on primary commodity exports exposes nations in the Global South to market volatility, particularly when tariffs and quotas escalate trade tensions. With multilateralism gaining traction globally, there is little room for protectionism. Therefore, Trump’s actions should be scrutinized, as disruptions to the global supply chain could harm the global economy. Consensus-building and mutually beneficial cooperation are necessary to address the unprecedented challenges facing the world today.

Protectionism is once again rearing its head, and the Global South must sharpen its ability to recognize shifts, adapt strategically, and proactively foster economic resilience. These nations need to take decisive steps to counter rising trade frictions and economic challenges, focusing on cultivating internal growth drivers and strengthening their economies.

As global trade faces increased uncertainty, with new tariffs being introduced after Trump’s return to the White House, nations in the Global South must implement domestic policies to support business growth. While tax holidays may attract foreign investment, they are not a long-term solution. A more effective approach would involve fiscal policies that promote business growth while maintaining fiscal discipline.

In the new technological era, cooperation in innovation and structural reforms at the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD) will be key to protecting the interests of the Global South. Silence in the face of these challenges will allow a few nations to impose economic policies that ultimately hinder global growth, disproportionately affecting developing nations.

On February 13, President Trump instructed his economic team to prepare plans for imposing reciprocal tariffs on every country that taxes U.S. imports. If enacted, this policy could lead to multiple trade conflicts and create significant global instability.

Furthermore, Trump’s decision to impose a 25% tariff on steel and aluminum imports, regardless of their country of origin, starting March 12, will impact countries that export these metals to the U.S. unless they meet Trump’s demands.

For resource-dependent countries in the Global South, the barrage of tariffs could present an opportunity to drive domestic economic transformation. By reducing reliance on primary commodity exports and fostering growth in high-value manufacturing and service industries, these nations can improve their position in the global value chain and build resilience against external trade shocks.

Moreover, Global South nations should embrace the digital and green economies to open up new avenues for trade growth. Expanding digital trade and advancing green industries, such as clean energy technologies, can create long-term trade opportunities.

At the bilateral and regional levels, countries in the Global South must diversify their trade partnerships and build an interconnected global trade network. In response to U.S. protectionist policies, they should actively promote South-South cooperation and seek trade partnerships with other developed economies. Diversifying trade relationships will reduce reliance on the U.S. market and mitigate the impact of trade wars.

Initiatives like the African Continental Free Trade Area (AfCFTA) and BRICS provide a platform for emerging economies to trade and cooperate in finance, shielding them from harmful economic policies like tariffs and quotas.

The writer is a Journalist and Communications Consultant.