Tariff wars and their effects on social development

Hindustan Times

26-04-2025

In an increasingly interconnected global economy, the resurgence of tariff wars marked by the imposition of protectionist policies and retaliatory trade measures poses a grave threat to the social development agenda pursued by governments, international organisations, and civil society actors. While tariff policies are often justified under the guise of protecting domestic industries and correcting trade imbalances, their unintended consequences reverberate far beyond the economic realm, deeply affecting social sectors such as health, education, poverty eradication, hunger mitigation, migration, and environmental sustainability. In light of escalating geopolitical tensions, most notably between the US and China, as well as the EU's tightening trade regulations, it is crucial to analyse how these trade dynamics are influencing global social welfare.
The health sector stands out as one of the most immediately impacted areas due to its dependency on globally interconnected supply chains. Tariffs on medical devices, pharmaceuticals, and critical health infrastructure inputs can significantly inflate costs, thereby reducing accessibility and threatening public health systems, particularly in developing countries. During the Covid-19 pandemic, countries such as India and Brazil suffered from inflated prices for imported ventilators and personal protective equipment due to global supply constraints exacerbated by protectionist measures. According to a 2023 World Health Organization (WHO) report, an estimated 30% increase in the cost of essential health commodities was recorded in the wake of post-pandemic supply chain adjustments, worsened by tariff hikes imposed by countries seeking to boost domestic production. This trend disproportionately affects low-income countries that lack domestic pharmaceutical manufacturing capabilities, thereby deepening health inequities and delaying progress toward Sustainable Development Goal 3 (Good Health and Well-being).
Education systems are also vulnerable to the consequences of disrupted trade and constrained fiscal budgets. In many countries, especially those dependent on international aid and trade-based revenues, tariff wars result in reduced national income, forcing austerity measures and cuts in public spending including education. The World Bank's 2024 Global Economic Prospects report warned that global education investments could face a cumulative shortfall of over $210 billion by 2026 due to slowed economic growth attributed to protectionist trade regimes. Additionally, the increase in educational equipment and technology costs much of which is imported affects both access and quality, particularly in rural and underserved communities. In Africa, where cross-border educational partnerships and donor-funded programmes play a vital role, increased trade friction has already led to a reduction in foreign direct investment in education infrastructure, as noted by UNESCO's 2023 Education Monitoring Report.
Poverty reduction efforts, which are closely tied to employment and market stability, have been significantly derailed by the volatility of global trade relations. Developing economies, which rely heavily on agricultural and manufacturing exports, are particularly susceptible. For example, Sub-Saharan African countries have faced diminished demand for raw materials like cocoa and cotton due to protectionist policies in Europe and North America. The African Development Bank estimates that for every 10% increase in global tariffs on primary exports, up to 1.5 million jobs in Africa are jeopardised. Moreover, trade barriers increase consumer prices for everyday goods, straining household budgets and pushing more individuals below the poverty line. The International Monetary Fund has projected that global poverty could rise by 3% if the current trend in tariff escalations continues, especially in regions already grappling with post-pandemic economic recovery.
Hunger and food insecurity, both of which are closely tied to the flow of international food commodities, are also heavily influenced by trade restrictions. Food-producing countries, often incentivised to protect their markets, have, in recent years, imposed export restrictions that exacerbate shortages in food-importing nations. In 2022, India imposed export bans on wheat and rice amid domestic inflation, leading to significant food shortages in several African and Southeast Asian nations. According to the World Food Programme's Global Report on Food Crises (2024), 345 million people faced acute food insecurity, an increase of 25 million over the previous year with trade-related disruptions cited as a major contributing factor. Tariffs on fertilisers and agricultural machinery further impede productivity and inflate local food prices, disproportionately affecting marginalised rural communities.
Migration is yet another social phenomenon shaped by the interplay of trade policy and economic stability. Economic downturns and reduced employment opportunities frequently resulting from diminished export potential often serve as push factors for migration. However, protectionist regimes tend to coincide with more restrictive immigration policies, compounding the plight of vulnerable migrant populations. In the case of the US, rising anti-immigration rhetoric and deportation rates have been linked to broader nationalist economic policies. According to Human Rights Watch, asylum seekers and economic migrants from Central America have increasingly faced detentions and deportations, even as their countries of origin experience economic crises exacerbated by trade exclusion. The convergence of economic protectionism and social exclusion thus creates a feedback loop that exacerbates inequality, xenophobia, and social tension.
Environmental protection efforts are often deprioritised during periods of economic retrenchment driven by tariff wars. Many countries, facing reduced revenues and economic stagnation, scale back environmental programs in favor of short-term industrial gains. The rollback of environmental safeguards under the Trump administration, justified in part by trade competitiveness concerns, serves as a stark example. According to the United Nations Environment Programme (UNEP), global investment in renewable energy dropped by 12% in 2023, with countries citing budgetary constraints influenced by trade-related revenue losses. Moreover, tariffs on green technologies such as solar panels, electric vehicles, and wind turbines discourage their adoption and disrupt climate action plans. For example, EU tariffs on Chinese solar panel imports raised prices across the European market by an estimated 15%, delaying projects crucial to energy transition goals. As the climate crisis continues to threaten global ecosystems and livelihoods, any regression in environmental policy, triggered by economic nationalism, will have long-term planetary consequences.
In synthesising these challenges, it becomes evident that tariff wars are not merely economic tools but instruments that inadvertently shape the trajectory of global social development. The interconnectedness of global supply chains means that trade disruptions have cascading effects on domestic policy capacity, social infrastructure, and public welfare. To address this, a recalibration of trade policy is urgently required, one that incorporates social impact assessments and ensures alignment with the 2030 Agenda for Sustainable Development. Institutions like the WTO, IMF, and regional trade blocs must play a more proactive role in mediating disputes and encouraging cooperative frameworks that prioritise human development alongside economic growth.
While tariffs may serve short-term national interests under the banner of economic sovereignty, their broader implications reveal a stark cost to global social well-being. Health systems, education access, poverty reduction, food security, migration dynamics, and environmental protection are all intricately tied to the ebb and flow of global trade. Protectionist strategies, if pursued without regard for their social impact, risk eroding decades of progress in development and human rights. It is, therefore, imperative for policymakers to adopt a holistic, multilateral approach to trade, one that harmonises economic imperatives with social justice, sustainability, and international solidarity.
This article is authored by Gunwant Singh, scholar, international relations and security studies, Jawaharlal Nehru University, New Delhi.