‘Tariffs on exports from Nigeria, others may hit 37% as trade war deepens’
Although average tariffs on exports from Nigeria and Zambia might not go beyond 10 per cent under the trade war regime between global economic leaders, there are concerns that tariffs applied on developing countries’ exports could rise from 3% to 37% if sweeping tariffs are not checked, UNCTAD has said.
According to the United Nations Conference on Trade and Development (UNCTAD), current trade actions augur a situation in which everyone will lose.
UNCTAD noted that developing countries that played no role in starting the conflict would be even less able to afford it.
“On average, tariffs applied on developing countries’ exports could rise from 3% to 37%. But whereas average tariffs affecting countries like Nigeria and Zambia probably would not go above 10%, those against Mexico could reach as high as 60%. Likewise, countries like Costa Rica, Ethiopia, Sri Lanka, Bangladesh, and Turkey could face average tariffs of 40-50%”, says UNCTAD.
Secretary-General of UNCTAD, Dr. Mukhisa Kituyi, explained that in a trade war, companies across a wide range of sectors will lose profits, and workers will lose jobs, adding that governments will lose revenue, and consumers will have fewer product choices available; and, no matter where they are, firms, governments, and households will incur higher costs.
UNCTAD research shows that average tariffs could rise from negligible levels to as high as 30% for US exporters and 35% and 40% for EU and Chinese exporters, respectively.
Kituyi added that a global trade war might jeopardize the multilateral trading system itself, saying: “It would no doubt result in tariff increases greater than anything we have seen in recent history. So, even if the “elephants” have sufficient economic weight to withstand a trade war, they would not benefit from one.
“Moreover, a trade war would be a severe blow to the world’s poorest countries, and to the hope of doubling “least developed countries’ share of global exports” by 2020 under the Sustainable Development Goals (SDGs). It would compromise the fragile economic recovery since the global financial crisis a decade ago, thus undercutting growth and development around the world. And it would limit the extent to which trade could be used to advance global goals.
“The harm caused by a full-on trade war would be felt well beyond the realm of international commerce. Today’s trade climate reflects a disturbing global trend toward nationalist unilateralism.
“The countries that helped reshape our world for the better through trade are now abandoning international cooperation, and that shift may have serious implications for other areas such as global efforts to combat climate change and ensure peace and prosperity for all. The easiest way to win a trade war is to avoid it altogether”.