In April 2025, Donald Trump made headlines again—this time with a fresh wave of tariffs. The new measures hit a wide range of imports: Chinese electronics, Latin American produce, African raw materials. At face value, it’s another chapter in the U.S.-China economic standoff. But step back, and the real story is this: developing nations are likely to bear the brunt.
These countries often rely on a steady flow of exports, foreign investment, and a place in global supply chains. When the world’s largest economy slams the brakes on trade, the aftershocks aren’t evenly spread. They hit hardest where economies are most fragile. The World Bank has already cut growth forecasts for most developing nations. The WTO predicts global trade could actually shrink. And the IMF is warning of falling commodity prices, rising uncertainty, and tighter financial conditions for countries that can least afford them.
It’s not just about numbers, though. Economic theory helps us understand why this matters so much. The “infant industry” argument—going back to Hamilton, List, and more recently Ha-Joon Chang—says that young industries sometimes need protection to grow strong. Think of it like putting up training wheels while a sector finds its balance. But if those wheels never come off, the industry doesn’t grow—it just becomes dependent. We’ve seen this before. In Brazil’s 1980s tech push and Turkey’s earlier industrial drive, long-term protection bred inefficiency and left those countries trailing behind global competitors.
There’s also the Prebisch-Singer hypothesis, which points out something many developing nations have known for decades: exporting raw materials rarely makes you rich. Over time, the value of these goods tends to fall relative to manufactured products. When tariffs are slapped on those exports, it’s like kicking away the ladder. Countries earn less, invest less, and stay stuck.
And this isn’t some theoretical worry. We’ve lived this. In 1930, the U.S. passed the Smoot-Hawley Tariff Act to shield its farmers during the Great Depression. The world retaliated, and global trade collapsed. Fast forward to the 2018 U.S.–China trade war—tariffs again backfired. Supply chains broke down, costs rose, and unintended industries suffered. Even the 2002 U.S. steel tariffs ended up hurting more American businesses than they helped.
So, is there any way a developing country can turn this to its advantage? Possibly—but only with extreme care. Economists like Dani Rodrik argue that well-targeted, temporary protection can work—if it’s part of a broader strategy. That means investing in skills, infrastructure, and export diversification. It also means choosing your battles: protect a few high-potential industries, monitor progress, and pull support once they’re ready to compete.
That’s a tough ask. Many developing countries don’t have the fiscal space, policy tools, or institutional muscle to manage this well. Which is why global support is essential. The World Bank, IMF, and WTO should step in with trade facilitation tools, low-interest loans, and policy buffers to help countries weather the shock. At the same time, developing nations need to act fast—negotiate exemptions, diversify trade relationships, and double down on adding value at home. Turning raw coffee into packaged goods or cotton into finished garments makes countries less vulnerable to the next tariff wave.
Trump’s tariffs may have been designed with U.S. factories in mind, but their impact stretches much further. And as history and economics both show, protectionism tends to hurt the poorest most. For developing nations, the stakes are high—but so is the potential to adapt. With the right policies and partnerships, some might come out of this not just surviving—but stronger.