President Donald Trump’s tariffs may cause more harm to poor countries than to the US. While most news in the US focuses on the impact of the trade war on American businesses and consumers, millions of workers in poorer nations like Bangladesh, Vietnam, and Cambodia face losing their jobs. If tariffs continue, they could reverse years of progress in reducing extreme poverty worldwide.
Workers in developing countries such as Ecuador, Guatemala, and Lesotho are at great risk. Many of these people work in factories that produce clothes, shoes, and electronics for American companies. These jobs have helped lift millions out of extreme poverty.
Global trade has played a major role in lowering poverty. The World Bank reports that the percentage of people living in extreme poverty has fallen from 31% in 1990 to just 8% today. Economists agree that trade increases incomes and supports faster economic growth in both rich and poor nations.
More than 1,800 economists recently signed a letter saying that free trade improves national economies and warned that tariffs could hurt US businesses as well as workers in poor countries who rely on trade for their livelihood.
Vietnam is set to face a 46% tariff on its exports, which could be devastating. Nike manufactures half of its shoes in Vietnam, employing about 500,000 workers through its supplier factories. Apple also depends on factories in Vietnam, where nearly 200,000 people work.
Before the COVID-19 pandemic, Vietnam’s poverty rate dropped from 30% in 2000 to around 2.5%. Even jobs in factories often criticized as sweatshops pay about $10 per day, which is well above the global extreme poverty line of $2.15 per day.
Profit margins in these factories are very thin, usually around 5%. A high tariff could raise costs so much that factories close and workers lose jobs. Many would then have to work in informal sectors, where over 20% of Vietnam’s population still survives on less than $6.85 per day.
Bangladesh faces similar risks with a 37% tariff looming. Its garment industry employs 4 million people and makes up 13% of the country’s economy and 80% of exports.
The growth of Bangladesh’s garment sector helped reduce extreme poverty by two-thirds, from over 30% in 2000 to just over 10% in 2020. In 2000, around 40 million Bangladeshis lived in extreme poverty; by 2020, that number dropped to 17 million despite population growth.
Although some factories in Bangladesh have poor working conditions, jobs there pay nearly $6 per day. These jobs help workers escape extreme poverty. Tariffs that damage this industry could push workers back into worse poverty.
Many think tariffs only mean higher prices for US consumers, but the real impact is much worse for people abroad. For millions in poor countries, factory jobs offer the only chance for a better life. Losing these jobs could mean hunger, sickness, or even death.
President Trump says the US trade deficit means unfair treatment. However, economists explain that a trade deficit often shows the US is an attractive place for investment. It is not a clear sign of unfair trade.
Free trade benefits both rich and poor. It gives American shoppers more choices at lower prices. It also offers millions in poor countries a path out of poverty.
Tariffs might seem to protect US jobs, but they could end up hurting everyone, especially the poorest people who have the least power.
The trade war is not just about numbers or profits. It affects real people worldwide. If it continues, it could erase years of progress against poverty. Leaders need to consider the consequences before raising trade barriers that push millions back into hardship.
