GENEVA: Small and medium-sized businesses and developing economies face particular investment slowdown risks due to ongoing tariff uncertainty.
UN Trade and Development Agency Secretary-General Rebeca Grynspan expressed concern about potential investment declines in a Reuters interview.
“We fear that there will be more lagging numbers in terms of investment,“ Grynspan stated from her Geneva office.
She specifically highlighted potential impacts on small and medium-sized businesses worldwide and trade-dependent smaller nations.
While artificial intelligence has driven some trade and investment this year, Grynspan noted this growth remains concentrated and excludes many developing economies.
A July UNCTAD report revealed global foreign direct investment fell for the second consecutive year in 2024.
Investment concerns have intensified throughout 2024 as trade tensions continue rocking investor confidence globally.
President Donald Trump’s tariff decisions since taking office in January have significantly shaken financial markets.
These tariff policies have created widespread uncertainty across the global economic landscape.
Grynspan indicated that 2026 forecasts depend heavily on whether current trade tensions escalate into full-blown trade war.
Market adaptation to new tariff situations could eventually bring more predictability despite current uncertainties.
She specifically identified least developed African countries and small island states as particularly vulnerable.
These nations face worse conditions and possess less resilience during trade uncertainties compared to developed countries.
While the EU secured a deal with 15% duties on most exports to the United States, least developed countries face much higher tariffs.
Laos serves as one example, currently confronting 40% tariffs on its exports to the US market.
Grynspan urged the United States to exempt vulnerable countries from these higher tariff rates.
Lesotho recently received a modified 15% tariff rate following Trump’s earlier threat of 50% tariffs in July. – Reuters
