President Trump’s sweeping tariffs, announced on “Liberation Day” and set to take effect on July 9, do not discriminate by country and target even the United States’ longtime allies. However, the consequences of tariffs are likely to differ between countries with stronger economies and institutions compared to those with weaker ones. That means countries such as China and the EU will better absorb the tariff shock, while countries in the Global South will face a significant threat to their economic stability and development prospects.
What Awaits the Global South on July 9?
By July 9, the Liberation Day tariffs were set to impose disproportionately high tariffs on many countries from the Global South, such as Lesotho, with a 50% tariff, and Cambodia, with a 49% tariff. Such high tariffs risk severely damaging their economies and making them vulnerable to global economic shocks. That’s why, even though there remains a possibility of extending the implementation deadline, Global South countries should hone their strategies very well.
In fact, Trump’s tariffs are just another example of the Global South finding itself caught in a situation where major powers weaponise their networks. For a long time, the US has leveraged its centrality in financial systems and development institutions, such as the IMF and the World Bank, to gain an advantage over its competitors. Meanwhile, China has utilised its network within the Belt and Road Initiative for the same purpose.
The imposition of Liberation Day tariffs bears some resemblance to these past events, but there is a significant difference that cannot be overlooked. The world, especially the US, is becoming increasingly inward-looking day by day, prioritising “national interests” while cutting development aid, leading to the deterioration of multilateralism.
This, combined with the rise of global uncertainty, has left the Global South grappling with disrupted supply chains, reduced market access, and declining foreign investment. The erosion of multilateral institutions and rules-based trade frameworks further limits the ability of these countries to defend their interests.
The Global South Has Agency—It’s Time to Use It
Despite these challenges, countries in the Global South possess the tools to navigate and resist external pressures by capitalising on their strategic geography, abundant resources, and the potential to forge new and dynamic alliances. In response, emerging powers within the Global South are increasingly pursuing alternative economic partnerships—both among themselves and with China—as a way to reduce reliance on the West, particularly the United States. Yet this approach risks creating new dependencies, especially on China.
To mitigate such risks, the Global South must broaden its network of trade partners and markets, not only moving beyond traditional alliances but also fostering intra-regional cooperation and strengthening internal growth engines.
Second, to ensure long-term resilience against such shocks, countries should channel international development funds and their resources to pursue structural reforms, while investing in technology and promoting high-value-added industries. However, for countries with limited economic resources and institutional capacity, this process is challenging. Overcoming such challenges can be achieved by prioritising gradual and targeted reforms, seeking international technical and financial support from institutions such as the UNCTAD, and fostering regional cooperation. These small steps may enable these countries to build resilience and to lay the foundation for sustainable economic diversification over time.
Third, Global South countries should leverage their unique assets, including control over critical geographic chokepoints such as key maritime routes and possession of rare earth materials. In this way, they can enhance their bargaining power in global trade and negotiate more favourable terms or secure concessions from major economic powers that depend on uninterrupted access. For instance, the Democratic Republic of Congo can use its rare earth minerals as a bargaining chip, an important asset for the US, as Washington’s latest involvement in helping resolve the conflict between the DRC and Rwanda has partly secured its investment in the region. This tactical use of critical assets, especially when timed effectively during periods of heightened geopolitical or economic tensions, will allow Global South countries to diversify their partnerships and mitigate the risks of geopolitical shocks.
Fourth, although the WTO and other multilateral institutions struggle to uphold multilateralism and keep pace with changing realities, Global South countries should continue to engage in multilateral and regional institutions. Because these institutions still provide a crucial platform for coalition-building and transparency, as countries need like-minded partners.
Moreover, businesses in the Global South should diversify their supply chains, renegotiate contracts, and adjust their pricing strategies. By doing so, companies can reduce their vulnerability and ensure greater operational resilience. While doing so, they should consider leveraging advanced analytics and scenario planning using tools including AI. This will enable businesses to anticipate trade policy changes and optimise their supply networks proactively, maintaining competitiveness in a volatile global market.
Finally, the countries of the Global South should not rush to secure an agreement. They should buy some time to test the waters and work toward a deal that is not finalised just to meet the July 9th tariff deadline, especially one that requires disproportionate concessions from them. Instead, they should continue negotiations with the Trump administration, demonstrating their good faith and aiming to secure a deadline extension, as South Africa has recently done.
Challenging Trump’s Narrative
In addition to all these steps, the Global South should subtly challenge Trump’s narrative, which focuses on leveraging individualistic fronts. Accordingly, the Global South must present a united front, similar to the one during GATT/WTO negotiations, that emphasises collective strength and resilience rather than fragmentation. By showcasing their capacity to build and sustain alternative economic partnerships beyond the US-led framework, these countries can challenge the notion that they must simply accept the US terms. This approach not only undermines the “negotiate with me or face punitive tariffs” ultimatum but also signals a shift toward a more balanced and multipolar global economic order where the Global South plays an active and influential role.
