NextFin news, On Monday, September 15, 2025, a detailed analysis published by Free Malaysia Today highlighted that US President Donald Trump’s tariffs, which took effect last month, are likely to deepen the economic divide between rich and poor countries. The tariffs, announced on July 31, 2025, impose higher trade barriers on lower-income nations, contradicting the World Trade Organization’s Generalized System of Preferences that traditionally favors developing economies.
The study examined 88 economies affected by the tariffs, including the 27 European Union member states, excluding statistical outliers. It found a statistically significant negative correlation of -0.34 (p≈0.0012) between tariff rates and countries’ per capita GDP. Specifically, countries with per capita GDP below US$10,000 face an average tariff rate of 20.3%, while those above US$35,000 face a lower average rate of 14.5%.
Developing economies, which often rely on exports of primary commodities or low-end manufactured goods with narrow profit margins, are disproportionately burdened. For example, textiles constitute about 44% of Sri Lanka’s exports, with 25.5% destined for the US in 2022, supporting a third of its manufacturing jobs.
The tariffs reflect the Trump administration’s view of economic interconnectedness as a strategic weapon rather than a shared opportunity for growth. This approach has raised concerns about the long-term impact on global trade relations and economic inequality.
Additional reports from August and September 2025 indicate that these tariffs have also stressed banking sectors in developing nations such as Vietnam, Thailand, and Mexico, with credit risks rising due to reduced export-driven growth. Southeast Asian economies, heavily reliant on exports to the US, have faced tariff rates as high as 49%, causing factory closures and investment contractions.
The tariffs have also disrupted global supply chains and challenged the export-led economic models of regions like Southeast Asia, which collectively had a GDP near $4 trillion in 2024. Despite some tariff rate reductions in August 2025 for countries like Vietnam and Malaysia, the damage to these economies remains significant.
These developments underscore the widening economic gap between wealthy and poorer nations, as the tariffs impose heavier burdens on low-income countries, potentially exacerbating global economic disparities.
Sources: Free Malaysia Today (September 15, 2025), Marketplace.org (August 8, 2025), GIS Reports (September 12, 2025).
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