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ITC Press conference: US tariffs impact on developing countries - 11 April 2025

33:51

MP4

2 GB

11-04-2025

Press Conferences | ITC

ITC Press conference: US tariffs impact on developing countries - 11 April 2025

ENG FRA

Shotlist Story

STORY: Tariff uncertainty and potential - ITC

TRT: 03’11”

SOURCE: UNTV CH

RESTRICTIONS: NONE

LANGUAGE: ENGLISH / NATS

ASPECT RATIO: 16:9

DATELINE: 11 APRIL 2025 GENEVA, SWITZERLAND

Speakers:

Pamela Coke-Hamilton, Executive Director, International Trade Centre, ITC

SHOTLIST

Exterior medium shot: Palais des Nations, Flag Alley
Wide, Press room podium speakers, photographer.
SOUNDBITE (English) – Pamela Coke-Hamilton, Executive Director, ITC: “You would have seen that the US on Wednesday announced a 90-day pause on the so-called reciprocal tariffs on imports from most countries, bringing down rates to 10 per cent while raising tariffs on imports from China to 145 per cent. China, in the meantime, has raised tariffs on imported US goods to 84 per cent.”
Medium, podium speakers.
SOUNDBITE (English) – Pamela Coke-Hamilton, Executive Director, ITC: “This wouldn't be the first time that there have been tremors in the world economic system. We've seen it over the last 50 years in different dispensations. This one is probably a little more harsh, a little more tremulous.”
Wide, podium speakers, Press room, TV camera, control booths, TV screens.
SOUNDBITE (English) – Pamela Coke-Hamilton, Executive Director, ITC: “So there will be shifting, I think, in supply chains, there will be a reassessment of global, alliances. There will be geopolitical shifts and economic as well.”
Wide, podium speakers, Press room.
SOUNDBITE (English) – Pamela Coke-Hamilton, Executive Director, ITC: “Countries like Mexico, China and Thailand, but also countries in southern Africa are among the most affected, alongside the United States itself.”
Wide, Press room, journalists, participants.
SOUNDBITE (English) – Pamela Coke-Hamilton, Executive Director, ITC: “Global trade could shrink by three per cent, with significant long-term shifts in trade patterns and economic integration. For example, exports from Mexico, which have been highly impacted, are shifting from markets such as the US, China, Europe and even other Latin American countries, with modest gains instead in Canada and Brazil and to a lesser extent, India.”
Wide, Press room, journalists, TV screens.
SOUNDBITE (English) – Pamela Coke-Hamilton, Executive Director, ITC: “Similarly, Vietnamese exports are redirecting away from the US, Mexico and China, while increasing substantially towards minor markets the EU, Korea and others.”
Wide, journalists, photographer, TV screens.
SOUNDBITE (English) – Pamela Coke-Hamilton, Executive Director, ITC: “Least Developed Countries including Lesotho, Cambodia, Lao PDR, Madagascar and Myanmar are most exposed to instabilities in the global trading system and least equipped to pivot as needed.”
Medium-wide, Press room.
SOUNDBITE (English) – Pamela Coke-Hamilton, Executive Director, ITC: “China and the US constitute about three per cent to four per cent of world trade. So therefore, if you look at it in, in big numbers, there's 96 per cent out there that's still trading and that will trade.”
Medium, photographer.
SOUNDBITE (English) – Pamela Coke-Hamilton, Executive Director, ITC: “The indeterminate extension of 90 days on and on does not necessarily lend itself to stability. So, irrespective of whether there is an extension on and on, the fact that there is no stability, there's no predictability will affect trade and firms and decisions that are being made in real time.”
Medium-wide, Press room.
Wide, podium speakers, photographer, journalists.
Wide, podium speakers, photographer.
Wide, TV cameras, control booths.

Global trade could shrink by three per cent as a result of the United States’ new tariff measures which in the longer term could reshape and boost as-yet untapped regional commercial links, a top UN economist said on Friday.

Teleprompter

[Other language spoken]

Welcome to the press briefing of the Information Service here in Geneva at the United Nations Restart.

As you have seen a little bit earlier today, because we have the privilege in there and the pleasure to have with us Pamira Cork Hamilton, who is the Executive Director of the International Trade Centre.

As usual with these prequels, Mrs Cork Hamilton will give you some initial remarks and then we'll take questions.

And of course, as you know, the subject of this prequel is potential impacts of US tariffs on developing countries.

Then we will observe a moment of break and then we will go to the agenda of the regular briefing.

So I'll start by giving the floor to Mrs Cole Hamilton.

Thank you for being with us.

Have the floor.

Thank you so much, Alessandra.

It's really good to be with you here all today.

We've been following the US tariffs, in particular the impact of the tariffs on developing countries and their small businesses.

Let me first give you the lay of the land.

You'd have seen that the US on Wednesday announced a 90 day pause on the so-called reciprocal tariffs on imports from most countries, bringing down rates to 10%, while raising tariffs on imports from China to 145%.

China in the meantime, has raised tariffs on imported US goods to 84% previous most favoured nation rates and trade remedies, plus new US tariffs on steel and aluminium and auto, and on importers of Venezuelan oil remain.

All initial estimates developed with the French economics Research Institute SEPI calculated before the announcement of the 90 day pause and the additional tariff hikes on China indicate that by 2040 the effect of the so-called reciprocal tariffs and initial countermeasures could reduce global GDP by 0.7%.

Countries like Mexico, China and Thailand, but also countries in Southern Africa are among the most affected, alongside the United States itself.

Global trade could shrink by 3% with significant long term shifts in trade patterns and economic integration.

For example, exports from Mexico, which have been highly impacted, are shifting from markets such as the US, China, Europe and even other Latin American countries, with modest gains instead in Canada and Brazil and to a lesser extent India.

Similarly, Vietnamese exports are redirecting away from the US, Mexico and China, while increasing substantially towards MENA markets, the EU, Korea and others.

So not all countries are affected by such changes equally.

Least developed countries, including Lesotho, Cambodia, Lao PDR, Madagascar and Myanmar are most exposed to instabilities in the global trading system and least equipped to pivot as needed.

The same goes for small businesses in those countries which don't have the capacity to absorb additional costs or to navigate such changes as their bigger counterparts do.

Some of these least developed countries rely heavily on the US market for their exports, using preferences such as the African Growth and Opportunity Act, or AGOA, which has allowed imports from sub-saharan African countries to enter the US market duty free.

Since 2000, the Soto has been making use of AGOA, sending 60% of its apparel exports to the US market, exporting on average more than 230 million in apparel a year over the past five years.

Before the pause in reciprocal tariffs, Lesotho faced the highest rate of 50%.

A 50% tariff would imply export potential losses of $210 million in the US market by 2029.

Another example on apparel as textiles as a top industry in terms of economic activity and employment for developing countries.

Bangladesh, the world's second largest apparel exporter, would face a reciprocal tariff of 37% should it come into effect, which could lead to a loss of $3.3 billion in annual exports to the US by 2029.

[Other language spoken]

It's easy to get caught up in the daily or even hourly updates, but there's a bigger story here and it's a story about opportunities and it's about the long game.

A key part of the solution for developing countries to navigate any kind of global shock, be it a pandemic, climate disaster or sudden changes in policies, lies in prioritising 3 areas.

That is value addition.

Sorry, that is value addition, diversification and regional integration.

If ever there was a time to make this pivot to diversification, value addition and regional integration, or what I call strategic re globalisation, this is it.

It's characterised by mutually beneficial trade rather than traditional development aid on diversification, this is about exploring new markets to sell, to reduce reliance on one of two big trading partners.

It's the concept of don't put all your eggs in one basket to absorb some of the losses on the US market.

For example, Bangladesh could explore European markets which still hold growth potential for its apparel.

Lesotho can tap into alternative markets such as Belgium or Eswatini, where Lesotho holds a combined unrealised export potential of 22,000,000.

While this won't compensate for the estimated losses, it's one way to blunt the full impact on value addition.

This is about developing countries moving from selling commodities to focusing on in country processing of goods before export.

Value added goods help developing countries retain more value so they're less affected by sudden drops in prices of coffee, cocoa or copper on global markets, for example.

This is another way to improve overall resilience on regional integration.

This is about developing countries looking at their neighbours and choosing to invest in trade relationships at the regional level.

The African Continental Free Trade Area is one example with the potential to transform the way Africa trades within and with the rest of the world.

Let's look at the example of Cote d'Ivoire.

If tariffs were fully eliminated, Cote d'Ivoire could increase intra African exports by 25%, partially compensating for the anticipated $563 million losses on the US market.

So there are opportunities for developing countries, not just to navigate times of uncertainty, but to proactively prepare for the long haul.

Thank you very much.

Thank you very much, Pamela.

It's really good to have this overview.

And now I'm going to open the floor to questions, starting with the room if I can see.

OK, I'll start with John.

Sarah Costas, I'll introduce you to journalists.

John is our correspondent of Francois Cat, English Channel and The Lancet.

John of the Floor, yes, good morning.

I was wondering if you could give us some in house estimates by ITC on the impact for exports in the next year, not to 2029.

What would happen if they kicked in in 90 days time the reciprocal tariffs?

And also with reference to the sub-saharan African countries, what would be the overall impact?

Would they be affected or would there be a wave, a waiver because of a goer?

Also estimates for the short term not for 2029?

[Other language spoken]

So Pamela, we answer every question in press conference style.

And I just wanted to also inform the journalist that Pamela has come with Julius Peace was the Chief of Trade and Market Intelligence.

She's on the podium with us also helping to answer questions.

Pamela, thanks very much.

I'll leave the exports in the next year to Julia.

But on sub-Saharan Africa, I would say that there still is a question about whether AGOA would give a waiver.

There's there's no clarity yet on the decision that was taken on the tariffs and whether that would be in a sense overriding ago.

Their countries are seeking clarity, but frankly at this point there is none.

The assumption is that it continues to hold, but different countries have come up with different takes on it.

Kenya believes that it holds, other countries in Africa do not and so clarity is being sought.

What is also clear is that AGOA is due for renewal or not in September of this year.

There have been conversations for the last two years about how it would be renewed and what would be included in that renewal.

One of the areas has been that many of the textiles and apparel manufacturers who utilised the AGOA sub-Saharan Africa programme said that if they did not have a signal of renewal by 2024, they would not invest.

So that is also a challenge that sub-Saharan Africa is facing with respect to AGOA and the renewal or extension of the programme.

I'll turn over to Julia on the numbers.

The numbers we have ready today are for 2029.

We'll expect we, we are expecting new GDP growth forecast from the IMF coming in, in April and we'll be happy to update our results and also for next year.

[Other language spoken]

I'm quite surprised that you don't have a short term estimates for exports.

You're there to promote developing countries exports.

But anyhow, my second question is concerning developing countries producing more in house.

What would be the impact of artificial intelligence and automation?

Because the whole argument of the Trump administration has been reassuring.

Do you think developing countries will have the resources to upgrade and to be competitive or will they lose trade to developed countries again with the technology shift?

[Other language spoken]

I'm sorry we don't have the numbers yet for the coming year, but we will on, on the issue of whether there will be a kind of reassuring to developed countries, the decisions to reassure are multifaceted.

It's more than just about whether they can avoid tariffs or not.

Moving a firm takes up to two to three years.

They have to look at the long game if moving back to say the US or a developed country, they'd also have to look at the cost of of labour, the cost of inputs, what will be required in terms of regulations, how this would impact them.

And so the decisions are not as as clear cut as simply trying to avoid a tariff.

I think that many of the developing countries themselves are going to continue to engage in this.

The issue is how will they shift their own market access?

In other words, will they shift to Vietnam?

Will they shift to Mexico?

Will they shift to other countries like the EU?

Also the the block that will receive their goods.

It's not so much that there will necessarily a shift back to developed countries as it may be a shift to other developing country markets or intermediate goods going through those developing country markets from China back into the United States.

Thank you very much.

Yes, Christopher Volta, the chief of the AFP Bureau here in Hello, thank you for taking my questions.

I, I just have a, a couple, One of them is I, I don't quite understand how you can do projection and give us numbers on 2029 or 2040 given the uncertainty that yourself just underlined.

And we have absolutely no idea what's happening from one day to the other side.

Not quite sure to understand how you calculate 5 years from now or 4.

Anyway, the I was also wondering if you could give us an idea.

I'm not, I'm not quite sure that the general public usually understands the complexity of the supply chains and how that works.

So how fast do you think that developing countries, for example, can can change the, the way their supply chains or their export markets?

How fast can that go and and how would it like concretely work?

If you can give us an example or two?

[Other language spoken]

Yes, of course.

I mean supply chain adjustments are structural and they take time and obviously in an environment where we see a lot of uncertainty and you've pointed it out, a lot of tariffs, they, they come, they are suspended.

It's basically harder for firms, right, to take such a decision to make a structural adjustment.

What we do see in this estimates of which other markets are available, some of which our Executive director stated in her statement, these are growth opportunities that are there that haven't been used yet and they are there because they are market frictions at the moment.

These market frictions may relate to companies not exactly meeting consumer preferences in the target market, they may relate to companies having difficulties using preference already given given to them in preferential trade agreements and all that is subject to more assistance, assistance from business support organisations.

So this is something that in many cases can be looked at in the relative short term because it just it's market frictions, it's opportunities that are there.

There is a demand for these products.

The countries can supply products to these alternative markets.

But currently these opportunities are not used because there are these frictions.

And this is where we see the trade support environment, including also trade for trade agencies like ourselves being of help to help countries and companies tap into these existing opportunities.

[Other language spoken]

I just wanted to add one more thing It it is that different developing countries are going to adjust very differently.

[Other language spoken]

The ability of Vietnam to switch their supply chain process or to, to move to different markets is going to be much, much greater.

And they're more nimble, more agile and they have more resources to be able to make that switch than Lesotho.

Lesotho has two things mainly textiles and apparel and diamonds.

And therefore their ability to to pivot is going to be constrained by that capacity issue.

And so there are two things that can happen.

1 We work with them to be able to shift whether it's their textiles and apparel into other markets, especially within the Southern Africa Customs Union or in tandem.

We work with them to develop other sectoral possibilities that also exist but have been, in a sense, ignored because they had this automatic 60% access.

Sure, of course.

So just to let's let's keep the the example of Lizoto, for example, to to have this value added or change of products that they would make or value added product and that probably they would need some money.

There is not much going around at least not for development or developing countries.

There is a lot sloshing around it seems in New York and can be invested very quickly when you get the right advice.

But so do you have any idea how much that would cost, what would be needed and and where the money would come from?

Well, there are a couple of things we're running the numbers now for, for these countries, especially for the least developed countries.

And we'd have to take an assessment of their current industry capacity, how much that has been tied to actual U.S.

[Other language spoken]

investment because that's also part of it since a lot of it was a goal.

And then how much of that can be either retrofitted or redirected to other markets.

The second issue is working with their business support organisations and with that sector to find export market potential using our export market potential map to see where are those other markets where this could be more easily absorbed, while at the same time looking at the opportunities in other areas that could be easily implemented within the loss of the framework.

So that's, it's early days, you know, but we're, we're working on it.

So let me see if there are other questions in the room before I go to the platform.

[Other language spoken]

I can't see the people, John.

Yeah, I go to the platform first to give opportunity to the other journalist to ask, and then I'll come back to you.

So if there are no other in the room, I'll go to the platform.

Maya plants the brief.

Maya, yes, thank you so much for taking my question.

Thank you Missus for the ITC to organise this conference too.

We have many questions, what programmes that are that support the least developed countries on their integration in the global trading system are affected with shifters on funding by the US after the ITC?

When you say shift, it's the shift in the cut in the aid budget or the overall decisions on tariffs.

Yeah, on the aid, OK, Director, aid IDC, OK.

Right now we have very low exposure on that.

Our commitment to LDCs in our new in our current strategic plan is at 45% delivery in terms of all our overall work.

We will be ramping that up as we move forward on determining the best methodologies for how to engage and and enable the LDCs especially to be able to navigate this these kinds of treacherous waters.

We have not been really impacted in terms of the aid system for IT CS engagement with these countries, but many of the countries themselves have been impacted by the loss of other programmes, which necessarily will impact on how much is being requested of us vis A vis assistance.

Thank you very much.

I want to give John the possibility to ask.

Sorry just one moment John because I see Maya has a follow up.

[Other language spoken]

Thank you very much.

The Trump doctrine is of reassuring is looking at the future of automation using robots doing jobs that are done by human workers.

Are developing countries looking to automate further their manufacturing base in?

How does ITC look at that and monitor that or support that?

[Other language spoken]

The use of AI and robots and and and new technology in production spheres has been a matter of discussion and implementation for a while.

Developing countries in a lot of ways need employment.

If you look across developing countries, especially in Africa, the number of youths below 25 is 60 percent, 70% unemployment in Sierra Leone.

So while everybody is is excited about AI and the integration of AI and, and, and technology there, there's also a human context here.

And I think getting people employed is the first priority.

So it's not that they wouldn't want to, but it is question of looking at how do we enhance the capacity while also keeping people employed.

Thank you very much, Musa CL Maedin, thank you very much.

I have a general question about this trade war.

Are we facing now the end of the economic system we have known for early 50 years?

And I have another question about the Director General said two days ago, the World Trade Organisation, the trade war between China and the United States could reduce trade between the two countries by up to 80%.

Can you explain us what that's meaning in the economic, international economic and the effect on the developing the developing country?

[Other language spoken]

Sorry.

[Other language spoken]

I missed your first.

The end of something.

[Other language spoken]

The end of the economic system, the end of Lafa.

[Other language spoken]

Oh, the World Economic system.

[Other language spoken]

Thanks so much for that question.

This wouldn't be the first time that there have been tremors in the World Economic system.

We've seen it over the last 50 years in different dispensations.

This one is probably a little more harsh, a little more tremulous, but I don't think it necessarily is going to be end per SE.

There's adjustments, there will be shifting based upon recognition that predictability and stability and reliability are important aspects of trade and therefore countries will take decisions based on that to determine how they move forward.

So there will be shifting I think in in supply chains.

There will be reassessment of of global alliances.

There will be geopolitical shifts in an economic as well.

And no, but definitely changes, yes, with respect to the the WTO, yes, the DG did indicate that it would be a 80% drop between the two countries.

Now China and US constitute about 3%, three to 4% of World Trade.

So therefore if you look at it in, in big numbers, there's 96% out there that's still trading and that will trade.

The the impact however will be and, and this comes to the issue of, you know, how integrated the world economy has become, especially through globalisation is that there's so many intermediate products that go through and and and work with China and US etcetera, etcetera.

That how that is going to play out will be the impact.

So the 80% reduction between the US and China is direct.

How that ripple effect will play out can actually be advantageous to some countries like Vietnam, like the countries in Asia.

It can also be advantageous to countries like Mexico where there has to be some shift.

Will the US shift into, you know, taking from Mexico or Brazil?

So they're, they're going to be shifts, but not necessarily, which is why there's a difference between the reduction in trade between the US and China directly 80% and the overall reduction in trade, which is now between 3 and 7%, depending on what the numbers are.

I mean, they've just increased.

China's increased to 125% this morning.

So what I'm saying is that, you know, there there's a, there's a difference between the two, but it will definitely shift a lot of how the value chain among different countries will now work.

I'm conscious of the time and I know that John and Chris have asked for a follow up, but I have Sato Kodachi, Yamir Shimbun waiting patiently on the platform.

And then we will go to Mr Liang and if we have time to the follow-ups.

So let's go to Satoko Satok of Yamir Shimbun.

Thank you very much.

[Other language spoken]

First of all, could you give us your opening remarks because you gave some figures and then you said different developing countries are responding differently and you give the example of Lesotho and Vietnam and ITC works with them to help them to export textile and apparel into other markets.

But could you give the example which market you are talking about given the fact that the LDC already have duty free quarter free to developed countries?

[Other language spoken]

I'll, I'll make it available to on, on the different developing countries, which markets, let's take for example the LDCs, they, they have EBA everything but arms.

How much of that has actually been utilised because there has already been an uptake of most of their textiles production, say through a goal or through another programme into the United States?

There's a tendency to avoid or not, let's put it this way.

They don't have the capacity to supply into other markets where there is **** export potential.

So there's the opportunity to shift their produce to these other markets where they also have preferential access but have not utilised it in the way that they could have.

I'll give you another example.

The the Sibera in terms of utilisation after over 30 years has been 11% Carib can same thing.

There are so many agreements out there that are beneficial to developing countries that have not been utilised in full because of supply side constraints.

One of the things we need to work on is those supply side issues for these countries, as well as meeting certain standards and certain mechanisms for export that currently may be a challenge to meet certain market requirements.

Mr Tong Liang, China Economic Daily, thank you, Alexandra.

[Other language spoken]

Sorry for being late.

So here's a question, brief question in case it is an old question raised by others just admitted to save the time.

It's about a 90 day grace period given by Trump earlier this week.

Do you perceive this policy to hold which has a significant which has a significant implication because whether it is United States, we bring up every country against China or United States showing itself exposing itself to be against everyone else.

That depends on whether the 90 day grace period to hold extended.

If I'm right in I'm trying to think what you're asking me you're asking me if the US is trying to use the 90 day as a mechanism to get more allies to clarify it quickly.

I mean do perceive the US to be able to extend the 90 day Greece.

On and on and on so that this trade will is not the US no holds barrel against everyone in the world but weaving everyone else against the China saying OK, you are on the list, but you're exempted from now.

[Other language spoken]

I I wouldn't want to make a political statement on that.

What I can say is that the the indeterminate extension of 90 days on and on does not necessarily lend itself to stability.

So irrespective of whether there is an extension on and on, the fact that there is no stability, there is no predictability, will affect trade and firms and decisions that are being made in real time.

[Other language spoken]

Thank you very much.

We're really running out of time, so I'll, I'll take Chris and John's questions quickly together.

[Other language spoken]

John, you still want to hold your question very quickly please?

Yes, actually it was a follow up to Christoph's question.

You were mentioning about possibilities for new export markets or trade diversion from the USA to the EU Asian markets.

But have you factored in that in in sub-Saharan Africa, the port connectivity is not very strong and acts and the roots and the same applies with some Latin American countries.

So even where are they going to get the roots to get their goods to market and how much of an added cost that would be?

[Other language spoken]

John, you, I need to sit with you separately because you're asking existential questions here.

He he will always be.

[Other language spoken]

But the truth is, yes, all of this is in the mix.

The one of the reasons why I raised the the Africa Continental Free Trade Area as a, as a real opportunity and a real possibility is that that agreement or that arrangement takes into account the infrastructure and logistics issues that need to be addressed within Africa.

It takes into account all of the fundamentals in terms of tariffs, in terms of customs that need to be fixed or addressed within Africa in order to take advantage not just of intra African trade, but also trade that goes out of Africa.

[Other language spoken]

And I think that is where the opportunity lies that if this can be in a sense a a spur kind of turbocharging the the intra African, the African continental free trade area to really get these things in place, it can fundamentally change how Africa trades and the impact that will have on the African economies as a whole.

[Other language spoken]

I think really that unfortunately we have to close here.

I would like to thank you very, very much for this important update.

And also ask Susanna if you can send Susanna the the note of Pamela.

[Other language spoken]

We will stop for one minute to let Pamela go and resume the the regular briefing.

Thank you very much.