US President Donald Trump’s aggressive campaign against the global tariff system in 2025 has brought perceived economic benefits to segments of the American public. However, for many affected nations both near and far, it feels more devastating than the Middle Eastern conflicts Trump has currently placed ‘on hold’. His message is unambiguous: relocate manufacturing to the United States or face steep tariffs.

Amid a ballooning US deficit – now reaching USD 3 trillion due to a major congressional spending bill, tariffs have become a key tool for revenue generation. Trump’s sweeping tariff hikes, retaliatory trade disputes, and inflationary ripple effects are reshaping global commerce, straining alliances and raising consumer prices both at home and abroad.

While some analysts warn that President Trump is once again escalating tensions by threatening steep tariffs on America’s trade partners—evoking flashbacks to 2 April, when he announced the controversial ‘Liberation Day’ levies that sent markets tumbling and triggered widespread recession fears—the economic fallout has, so far, been limited.  

On Monday, Trump reignited his trade war by releasing the first batch of “reciprocal tariff” letters to 14 countries, warning of punitive tariffs unless new trade deals are finalised by 1 August. Some of the harshest rates include 40% tariffs on Myanmar and Laos, both developing nations with close economic ties to China and limited means to absorb such economic shocks.

Countries such as Thailand and Cambodia are facing 36% tariffs, while Bangladesh and Serbia are hit with 35% and Indonesia with 32%. South Africa and Bosnia and Herzegovina are set to receive 30%, with Malaysia, Tunisia, Japan, South Korea and Kazakhstan each facing 25% tariffs. Collectively, these 14 countries accounted for $465 billion in US imports last year, according to US Commerce Department data.

Among them, Bangladesh faces one of the steepest rates. The US has confirmed a 35% tariff on Bangladeshi exports—down from the initially proposed 37%, but still far above the 20% rate that Dhaka had sought, Reuters reports. With the 1 August deadline approaching, a high-level Bangladeshi delegation is in Washington for last-ditch talks with the US Trade Representative. In a firm message to Chief Adviser Muhammad Yunus, President Trump warned that any retaliatory measures would prompt an equivalent increase beyond the current 35%. Sri Lanka is yet to face the impact, but analysts warn that the worst-case scenario could severely affect the apparel industry—its largest export sector to the US market.

As an apparel-exporting hub, Bangladesh’s economy, heavily reliant on trade, risks a serious setback. Analysts warn that steep tariffs on developing economies could undermine their export sectors and lead to higher prices for American consumers, particularly in clothing and textiles.

Trump has stressed that trade agreements have already been secured with the United Kingdom and China, while a deal with India is reportedly nearing completion. For other nations, Trump was blunt: “We don’t think we’re going to be able to make a deal. So we just send them a letter.”

India, meanwhile, could lose up to $5 billion in exports to Vietnam if a trade deal is not reached with the US. Despite exporting approximately $76 billion in goods annually to the US, India competes directly with Vietnam on over 160 products, accounting for about $22 billion in trade. Of that, $5.4 billion worth of goods are at immediate risk—particularly a $353 million segment of price-sensitive and easily replaceable items. Experts from the Global Trade Research Initiative (GTRI) have advised India to closely examine Vietnam’s evolving trade terms, especially rules of origin provisions, which could determine whether products genuinely qualify as Vietnamese-made—thereby impacting fair competition.

Many of the Southeast Asian nations targeted—such as Myanmar, Cambodia, Thailand, Laos, and Indonesia—are deeply embedded in China’s “China+1” supply chain strategy. This model involves diversifying production to nearby, lower-cost countries to avoid direct US-China tariff fallout. By imposing tariffs on these partners, the US aims to disrupt China’s regional manufacturing influence and close alternative trade routes.

Trump’s approach extends beyond Southeast Asia. Several BRICS nations are also under scrutiny. India, South Africa and countries aligned with Russia have been warned or penalised under the same tariff campaign. South Africa, for instance, faces a 30% tariff, due to both trade imbalance and its involvement in China’s Belt and Road Initiative (BRI). Trump has stated that nations aligning with BRICS policies will face an additional 10% tariff, effectively punishing geopolitical alignment with China.

This hardline approach marks a shift towards a trade-centric form of warfare, aimed not just at balancing US trade books but at maintaining the global dominance of the US dollar and American manufacturing. Trump’s doctrine is to restore American leverage in trade at all costs, even if it means breaking away from long-standing multilateral norms.

Trump’s 2025 trade policy can be accurately described as aggressive, protectionist, unilateral and heavily focused on using tariffs as leverage—both to extract trade concessions and to achieve broader geopolitical goals.

He argues that while China has ‘systematically captured’ global trade with its win-win diplomacy, the US—as the world’s largest donor and trading partner—has done so without adequate checks and balances. 

Trump, a businessman-turned-president, insists his strategy is about making life easier for everyday Americans. In his worldview, “BRICS or China cannot make America great again—it’s either our way, or no way.”
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The writer is the Deputy Editor of Ceylon Today, a Colombo-based English daily. She can be reached at [email protected]