“Trade has become another site for geopolitical battles with an emerging pattern where real or perceived allies of the US are receiving more favourable tariffs treatment. In play are security considerations and the nature of trade balance.”The world is no stranger to shocks, those unexpected events that are by nature disruptive, resulting in widespread effects on the economy.

The Covid-19 pandemic and the Russia/Ukraine war easily come to mind. Even as economies look to adapt and build resilience to mitigate the impacts of these recent shocks, another one is in play.

Thanks to unilateral action and unpredictability of the timing of the imposition of trade tariffs by one of the world’s key economic players, the US, the global economy is contending with what the trade and development arm of the United Nations, UNCTAD, says is unprecedented high trade policy uncertainty especially amidst the emerging reality of multilateral systems and arrangements in flux.

Analysis in its September 2025 Global Trade Update contends that the volatility and instability infused in the global trade environment by the recent imposition of trade tariffs by the US is far more damaging than the actual impact of those trade measures themselves.

The ripple effect is far reaching, and resultant adaptive reactions preceded their actual execution. They cite data showing import volatility peaking in April, on the back of tariff measures coming into play. In the absence of clarity about the timing of those measures, and in anticipation of the resultant distortions to trade flows, pre-emptive adaptive actions happened without the benefit of considered planning.

Although the full impact of the US tariffs policy will only unfold in time, indications point to their generalised disruptive effect on cross-border trade and development outcomes. Wider knock-on effects are likely on investments, financial markets and borrowing costs.

Without trust and predictability (which are key currencies in trade relationships), there’s potential for a vicious cycle of unilateral and defensive actions compounding the uncertainty and undermining prospects for co-operation. There is also the risk of deepening and worsening existing trade imbalances through discriminatory trade practices.

Even at this early stage, evidence is appearing of the differential impact of the uncertainty on countries, with volatility taking a greater toll on developing, poor and vulnerable economies, further undermining their productive capacities and development prospects.

According to US import data for the first half of the year, imports from developing and least developed countries have registered greater volatility and disruptions (as seen in the second quarter of the year) than those of more advanced economies which only showed minor change.

Without a diverse export markets portfolio, the vulnerability of exporters from low-income countries heightens as they lack mitigation options to cushion themselves from such disruption.

For smaller businesses from poorer countries, for example, limited wriggle room to adapt and respond adds to existing constraints like low production capacity, inefficient transport modes and limited capital and credit, making them even more vulnerable and subject to revenue losses.

China is a study in an alternate outcome in the face of trade policy uncertainty. Diverse export market options give Chinese exporters a kind of wired in resilience as seen in the context of the decline in exports to the US in the current trade war.

Reports show that in the second quarter of 2025, Chinese exports to the rest of the globe increased, limiting adversity to its economy.

Similarly, although Brazilian coffee exports to the US (one of the world’s largest consumers) fell by almost 50 percent in August (following the imposition of tariffs), they rose in other markets (like Germany taking up the top spot as the largest importer) and among its neighbours in the region like Colombia and Mexico. Indicating an ability to secure gains through alternative markets.

A hallmark of the unfolding US trade policy actions is the way it has applied “strategic ambiguity” for leverage against its trading partners.

The evidence is in the extent to which pronouncements on the tariffs have not matched the measures, with evolving variations and discrepancies. Trade has become another site for geopolitical battles with an emerging pattern where real or perceived allies of the US are receiving more favourable tariffs treatment.

In play are security considerations and the nature of trade balance. The perceived wisdom that transparency and rules defined trade agreements with inbuilt dispute settlement mechanisms can minimise risk of erratic policy shifts is under contestation.

In the current scenario, there has been little certainty even in the case of the US/Mexico/Canada trade agreement in the context of counterproductive and provocative unilateral action of a key member.

For African countries, the entry of the new tariffs policy coincides with the planned end of the African Growth and Opportunity Act (Agoa) in 2025. There are fears of adverse effects in former Agoa eligible countries like Lesotho.

In abandoning the playbook, the US has challenged the buffer and predictability hitherto provided (or intended) by multilateral processes/arrangements around global trade. The result is geopolitical and trade tensions and a sense of higher risk and unpredictability on the global trade environment.

Atieno Ndomo is a social policy analyst with a keen interest in political economy.

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