As nations like the US and China increase tariffs on key imports and retaliate against each other’s goods, public revenues are being squeezed by slowed economic activity. In 2025, the International Monetary Fund reported a global Gross Domestic Product (GDP) contraction of 1.2% directly linked to tariff escalations, with emerging economies bearing the brunt.

This economic stagnation is straining education budgets worldwide. Countries like Brazil and South Africa, reliant on trade with China and the EU, have reported cuts in education funding by up to 8% this fiscal year. Rising costs of imported educational tools—such as tablets, e-learning platforms, and laboratory equipment—are hindering efforts to digitise learning environments. For example, India’s National Digital Literacy Mission experienced a 12% shortfall in expected digital infrastructure deployment due to increased prices for imported hardware from the US and Taiwan.

Furthermore, foreign student mobility has also suffered. Following retaliatory visa restrictions in the ongoing US-China trade row, universities in Australia and the United Kingdom reported a 15% decline in Chinese student enrolments, translating to a revenue loss of over $2 billion in 2024-2025.

The World Bank estimates that the ongoing tariff wars may push an additional 38 million people into extreme poverty by the end of 2025, particularly in sub-Saharan Africa and Southeast Asia. Inflation caused by increased import costs is affecting food security, with staple prices rising by over 20% in vulnerable economies.

In East Africa, the suspension of a proposed trade agreement with the EU has delayed infrastructure projects aimed at job creation and rural development. In Bangladesh, garment exporters face declining orders from US and European buyers due to protectionist sourcing mandates, jeopardising nearly two million jobs. Meanwhile, smallholder farmers in Latin America have seen their coffee and banana exports decline sharply due to new US tariffs, slashing household incomes and heightening food insecurity.

Even in advanced economies, lower-income communities are experiencing the fallout. In the US, grocery costs have risen by 9.4% since January 2024, disproportionately affecting lower-income households.

Perhaps one of the most concerning trends of 2025 is the erosion of global environmental cooperation due to tariff frictions. The EU’s Carbon Border Adjustment Mechanism (CBAM) has triggered retaliatory tariffs from major exporters like India, Indonesia, and China, fracturing collaboration on climate policy.

Countries are scaling back on green investments in favour of domestic economic protection. The US Inflation Reduction Act has become a flashpoint in trade disputes due to its green subsidies, which Europe and Japan argue disadvantage their firms. As a result, green technology exports have declined, with a 17% drop in international solar panel trade this year alone.

Meanwhile, Brazil and Indonesia have delayed reforestation and biodiversity programmes amid fiscal tightening, driven in part by reduced export earnings. China’s ministry of ecology and environment reported that the rollout of its next-generation electric vehicle infrastructure has slowed by 28% due to supply chain bottlenecks caused by import tariffs on semiconductors.

The 2025 tariff wars are deepening global inequality. Low-income nations that depend on favourable trade relationships to access foreign markets and technology are being left behind. According to the United Nations Conference on Trade and Development (UNCTAD), Least Developed Countries (LDCs) saw a 19% decline in export revenue in the first half of 2025.

This decline is undermining the Sustainable Development Goals (SDGs). Progress toward Goal 1 (No Poverty), Goal 4 (Quality Education), and Goal 13 (Climate Action) is stalling. The African Union’s Agenda 2063 has flagged the need for a revised continental trade strategy in light of rising global protectionism.

As global powers become more inward-looking, the multilateral cooperation necessary to support infrastructure development, climate resilience, and inclusive education is breaking down. Developing economies have voiced concerns at the World Trade Organization (WTO), calling for a global framework that prioritises development needs during trade disputes.

In a year marked by economic self-interest and geopolitical tensions, the world must not lose sight of the broader human and ecological costs of tariff wars. Policymakers must adopt trade strategies that incorporate social impact assessments and safeguard vital sectors from economic shocks.

International bodies like the WTO, IMF, and the United Nations should push for enhanced social clauses in trade agreements, ensuring that education, public health, and environmental programmes receive protected funding. Nations can also explore bilateral agreements with explicit carve-outs for green and humanitarian goods.

Ultimately, the 2025 tariff wars serve as a stark reminder that in our interconnected world, economic nationalism carries human consequences. The future will be determined not just by who wins at trade, but by who sustains progress where it matters most: In the lives of people and the health of the planet.

This article is authored by Ananya Raj Kakoti, scholar, international relations, Jawaharlal Nehru University, New Delhi.