Tariffs Slash Growth Prospects for 60% of Emerging Markets

Trade barriers strike again—developing economies brace for slowdowns as protectionist policies bite. Here''s the damage.

The squeeze play: Tariffs aren''t just political theater—they''re actively kneecapping growth trajectories across the Global South.

Numbers don''t lie: A staggering 60% of these markets now face downgraded forecasts. Turns out ''economic sovereignty'' comes with a nasty GDP tax.

Bonus cynicism: Meanwhile, hedge funds will short these very economies while lecturing them about ''free trade fundamentals.'' Classic.

Fresh projections add to earlier warnings from other international bodies

Just last week, the Organization for Economic Cooperation and Development said U.S. growth might slow to 1.6 percent in 2025, and inflation could approach 4 percent because of higher tariffs. The WHITE House dismissed that forecast as another “doomsday prognostication” that it says bears little relation to reality.

Still, the World Bank agreed with President Trump’s observation that before the recent hikes, the U.S. faced steeper duties on its exports than it imposed on imports. Gill urged other governments to cut their own levies to help restore trade stability. 

“This favorable access to U.S. markets was not a sustainable policy,” he said. “The differences should be reduced quickly and this can only happen if everyone acts in good faith.”

60% of developing economies will see slower growth due to tariffs

Several other emerging markets that were not expanding rapidly are now set to do even worse, among them South Africa. Many of these countries export raw materials, and prices for commodities have fallen sharply since the tariff increases dented global demand. The bank expects most will still grow rather than contract, though Iran is a notable exception.

“This latest setback will extend a long period of subdued progress for developing economies,” Gill said. “Outside of Asia, you’re not seeing improved living standards. The developing world is becoming a development-free zone.”

In its Global Economic Prospects report, the World Bank said it has cut growth forecasts for nearly 70 percent of all countries. It now expects almost 60 percent of developing economies to see slower growth this year, a downgrade of 0.3 percentage points from January. Low-income nations as a group are projected to grow by 5.3 percent in 2025, down 0.4 points.

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