The latest round of trade tariffs announced by the United States had surprised many states, especially in the global south. Unlike the large economies of European union or China, the Global South’s lack of coordination in trade talks with tariffs has led to the American administration to levy high tariffs on them.

Global South receives the short end of Trump’s stick

Several of the surprise rates unveiled include the unexpectedly high rates on several United States allies such as Indonesia, which received 36% before seeing a cut to 19% on July 16. Thailand, another ally of the United States also received 32%, higher than Vietnam’s 20%, and marginally lower than the China-friendly states of Cambodia and Myanmar. Even Singapore, a tight-knitted ally of the United States, also received 10%, with no reprieve.

The high rates were no surprise, but the range of the rates from 10% to 40% surprised many. Indonesia, led by Indonesian President Prabowo Subianto, who has heartily reminded President Donald Trump of his training and education in the United States in a congratulatory call to President Trump in a bid to improve relations, received 36% initially, surprising many. Although Indonesia received a reprieve to 19% later, it was still unusually high for an American ally, with a President who has touted his American connection. Thailand, another American-friendly economic and military ally since the Vietnam War, received a 32%, a rate that has been seen as unexplainably high, given fellow U.S. ally Singapore received a 10% rate. The Philippines, a treaty ally of the United States and former colony, has received a rate of 20%, a rate that is also oddly high for a close economic and defence partner of the United States. The new rate is even more insulting to the Filipinos, who had their tariff rate increased from 17% in the Liberation Day tariffs to 20% in June.

Malaysia, the incoming chair of the Association of Southeast Asian Nations (ASEAN), a bloc of countries representing Southeast Asia, also received 25%, a rate that exceeds the tariff initially proposed during President Trump’s “Liberation Day” set of tariffs.

The new rates also tell of a clear change in Trump’s foreign policy, where a close military alliance can no longer guarantee any special reprieve in the economic front for states. The change is symbolic of the unwritten post-World War Two guarantee of a global financial system that is underpinned and guaranteed by America, where America would accept small costs of underwriting the global order in return for global stability and a pushback against communism.

Failure of regional institutions

The high rates in developing Asian countries can be attributed to the industrial prowess of the region, which has developed its industrial base strongly in recent years as a response to China Plus One – an attempt to shift manufacturing, supply chains, and investments out of China to diversify. However, the rates are still higher than the European Union. The higher base rate for many of the developing countries shows the inherent weakness of not negotiating as a bloc with the United States

Regional institutions in the Asian region, especially for the Southeast Asian region exist, but they have not been able to coordinate themselves, unlike the European Union. Resultantly, the United States has been able to negotiate with each country from a position of strength, eventually leading developing countries to accommodate the American administration’s whims. This has led to the higher tariffs as the small countries are unable to form a large coordinated counter-tariff that could threaten the United States and make Trump think twice about the tariffs.

Accordingly, although regional organisations did mention the possibility of working together to find a new solution, rarely did any new ideas emerge. In Southeast Asia, countries from the Association of Southeast Asian Nations (ASEAN) did not negotiate as a bloc, preferring bilateral talks with the United States.

In South Asia, all hopes of a united front to face American tariffs ended with a days-long clash between the Pakistani and Indian militaries over a terrorist attack in Pahalgam in the two largest economies of South Asia.  Bangladesh, another key exporter of garments and agricultural products, was also unable to present a coordinated South Asian response due to a transitional government that has kept the country after the ruling Awami League was expelled by student protestors last year.

In South America, the Mercosur has not been able to present a united front to negotiate the new level of tariffs against the United States. Unable to even coordinate regionally, attempts to coordinate trade talks between the global south has remained impossible, and was especially evident with the lack of unity displayed at the BRICS summit in Rio de Janeiro, Brazil in early July 2025.

Renewing vigour in South-South trade coordination

The Global South’s disunity puts the Global South countries at a clear disadvantage in trade talks with the United States. Being already a small market, they are in a weak position to retaliate with tariffs of reasonable effect, such as those imposed by China and the European Union. This has dented the ability of the Global South states’ to threaten trade retaliation as a negotiating strategy for ongoing trade talks.

However, this does not mean that all hope is lost. The Global South is still a large bloc that is growing economically and in spite of its differences, generally committed to economic growth, with the UNTACD has reported that South-South trade has more than doubled from US$ 2.3 trillion in 2007 to US$5.6 trillion in 2023. Although South-South coordination may not be able to reduce the tariffs of the United States, it can work to coordinate a meaningful tariff systems between nations to enable South-South trade to replace the lost trade with the United States.

Minerals and labour as leverage

Moreover, with control over key resources that the United States crave, such as rare earths and oil, Global South states may continue to utilise existing frameworks such as the World Trade Organisation to take action the United States for unfair or unjustified trade tariffs, and withhold American access to critical minerals as a condition for a lifting of trade tariffs, as what China has done.

China, which processes the lion’s share of the world’s rare earth mineral resources and close to 70% of the world’s rare earth elements, has used rare earths as leverage for its trade talks, leading to a much-reduced rate in a deal that the United States and China had struck on May 12. However, it is not the only state to do so. Indonesia had previously announced that it was continuing with its quest for renewed trade negotiations with the Trump Administration and putting on its access to Indonesian rare earths as a sweetener. The tactic has seemed to bear fruit, with the Indonesians triumphantly having their tariff rate cut from 32% to 19%.

In the meantime, other states have also pursued the use of labour and other non-economic means as a means to get the Trump Administration to reduce tariffs. Mexico, which has been blamed for the origin of much of the drugs consumed in the United States, could increase cooperation with the United States drug enforcement authorities to curb drug smuggling as a potential incentive for a reduction in tariff rates. Other South American states might also increase their cooperation in blocking undocumented migrants from heading to the United States as a reward for a reduction in tariffs. Cooperation on non-economic issues as a means of trade for economic reprieve has not been new. Turkey, which houses 3.6 million refugees, mostly from Syria, regularly uses the possibility of releasing these refugees into the European Union to ask for more financial and economic support.

No lack of options, only lack of cooperation

In the face of high tariffs, the unity and coordination of the European Union has given it leverage over the United States. The Global South now has to act more like the EU, as only by being more united can it ensure its economic prerogatives do not get ignored.

Individual middle power states, such as Indonesia, Saudi Arabia, and India, can also lean on their own networks with smaller Global South states to give small Global South states a platform to air their own grievances. Although not all states have the individual agency and incentives of the United States, the cocktail of resources, cooperation over non-economical issues, and geopolitical support on selective issues can help to bolster the hand of the Global South when negotiating with the Trump Administration. When combined, these issues and the combination of access to the global South markets can prompt the United States to rethink its approach to global trade. The infrastructure, resources, and mechanisms for continued global trade are already present. As Trump and the United States take a step back, it is time for the Global South to take leadership of a world that continues to thrive on trade and exchange.

Note: The cover image was generated by AI for illustration purpose