Trump’s tariff war and aid cuts threaten poorest nations’ recovery

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Senior trade experts have warned that the poorest countries in the world are “dual pumping” of Donald Trump’s tariff and deep discounts of international aid budgets, undermining global efforts to eliminate poverty and address climate change.

The poisonous mix of “trade war and aid war” is to pressure the smaller developing countries that still recover from the Covid-19 and the increasing costs for international debt service.

“This is an ideal storm because when aid was reduced in the past, the trade was generally sustainable and predictable, and there was no dual blow,” said Pamela Cook-Shamilton, Executive Director of the International Trade Center in Geneva, a joint agency in the World Trade Organization and the United Nations.

She said that Trump’s threat from 40 to 50 percent of the customs tariffs on countries such as Lesoto, Madagascar and Mauritius were strongly risked with these economies.

Coke-Hamilton, a former Jamaican diplomat, was speaking to The Financial Times before the opening of a United Nations conference in Seville, Spain on Monday, designed to renew global support for the sustainable development goals of 2030.

This is the first such conference in a decade, but the United States officially withdrew from the summit earlier this month. The Trump administration stated in March that it “rejects and condemns” the goals that were agreed upon in 2015 and aimed at eliminating poverty and enhancing sustainable development by the end of the contract.

The Trump administration has also announced huge discounts in its aid budgets, as the United States Agency for International Development is expected to decrease from $ 60 billion in 2024 to less than $ 30 billion in 2026, according to the accounts of the Global Development Center, which is the Washington -based research center.

Other countries, including France, Germany and the United Kingdom, also cut off aid spending.

Charles Kenny, an old CGD colleague, said a mixture of neglected aid and uncertainty about the global economy will make it difficult to attract international investments to developing countries.

He added: “If this is not the actual death of the sustainable development goals, it is certain that it takes us away from them.”

The relief industry has warned that the construction agreed at the Seville Conference suffered many dilutions at the last minute in the main fields, including obligations to gradually dispose of fossil fuels and the United Nations process to create a mechanism between government to manage the developing debts of the country.

Budo Elliz, Director of Sustainability at the World policy Forum in Europe, a German research center, said that the summit had risked the transformation into a lost opportunity to direct the global development agenda.

He said: “In developing countries, the share of public revenue that goes to debt service has increased significantly in recent years, and is often with expensive loans from developers from the private sector. The United Kingdom or Germany borrows from 3 to 4 percent, and developing countries from 6 to 8 percent.”

Joseph Steglitz, a professor at the University of Colombia and the co -chair of the Jubilee report, which was commissioned by the late Pope Francis, said that the interest rates were private sector lenders who were receiving developing countries.

He said that many countries were unable to finance basic public services properly due to high debt burdens. The Jubilee report calculates that 750 million Africans, or approximately 57 percent of the continent’s population, live in countries that spend more on external debt service more than health or education.

The International Chamber of Commerce, located in 170 countries worldwide, will suggest reforms at Monday’s conference aimed at addressing the upper barriers that are lending to projects in developing countries.

When issuing projects credit in low -income countries, lending institutions usually need to maintain between four and seven times the amount in the third Bazlel guarantees.

The International Criminal Court will argue at the conference that the “targeted clarifications” of the Basel framework can open large quantities of private investment for developing countries, which represent 25 percent of global GDP.

“The model leads to development assistance is diminished, if not broken. The question now is what will be replaced? Certainly it must be a special model for the sector that can create an environment for local capital complexes,” said John Denton, Secretary -General of the International Chamber of Commerce.

Participated in additional reports by David Belling in London. Data is visualized by Amy Burit