Escalating trade tensions following the Trump administration’s tariff announcement earlier this month are wreaking havoc on the world’s most debt-distressed countries.
While a 90-day pause on some of the highest levies offers some reprieve, experts warn that the damage from all the uncertainty is causing economic chaos and leaving nations with a lot of debt and few choices.
Low- to middle-income countries’ debt levels have more than doubled since 2009, according to an analysis by the One Campaign, and the cost of servicing that debt has grown with it. Outside of China, Russia, and Ukraine, low- to middle-income countries paid $311 billion in debt service in 2023. The Trump administration’s tariff war could make it worse.