As the newly announced 1 August deadline for Trump’s reciprocal tariff regime approaches, uncertainty looms for global trade. While some major economies have secured partial deals, many emerging markets face escalating tariffs with little recourse. This special report examines the ripple effects across supply chains, strategic sectors, and commodity diplomacy. From shifting trade alliances to critical minerals as bargaining tools, this special report explores how governments and businesses must recalibrate strategies to navigate a fragmented, transactional, and increasingly volatile trade environment.

On 9 July, the 90-day grace period granted under US President Donald Trump’s new reciprocal tariff regime was set to expire. Originally framed as a window for bilateral trade negotiations following President Trump’s so-called “Liberation Day” speech on 2 April, the deadline has arrived with limited concrete outcomes. While the extension of the tariff deadline to 1 August is welcome, progress on trade negotiations remains limited. Aside from a moderate agreement with the United Kingdom (UK), a partial US-China tariff reset, and a deal with Vietnam announced on social media, most talks are either symbolic or incomplete. Social media posts from the US administration on 7 July capture letters threatening 25 percent tariffs targeting allies like Japan and South Korea, while 12 others face revised rates despite ongoing efforts to reach new agreements. Although larger economies like India and the European Union (EU) have received some White House attention, many smaller markets remain without a formal response from the US Trade Representative (USTR), despite their readiness to engage.

For many emerging and frontier markets, particularly across Africa and Asia, the unpredictability of the US approach is prompting a recalibration of longstanding trade rules. Supply chains are being rerouted, trade alliances reconsidered, and commodity-based diplomacy is taking on new urgency as governments and firms seek to preserve access, competitiveness, and fiscal stability amid rising external pressures. For those navigating these fault lines, success will increasingly depend on the ability to adapt commercial strategies to a new global trade environment.

PANGEA-RISK examines this evolving landscape, highlighting the risks to specific regions including Africa and Asia, alongside the opportunities that lie in targeted sectoral deals, enhanced regional integration, and renewed engagement with alternative trade partners for emerging markets.

The US reciprocal tariff programme

President Trump’s reciprocal tariff programme, proposed in April 2025, aims to recalibrate global trade by imposing tariffs on countries that the US deems to have unfair trade advantages. The policy introduces a baseline 10 percent tariff on most imports, with higher rates ranging from 20 to over 50 percent targeted at specific countries or sectors based on perceived trade imbalances or strategic concerns. The policy departs from traditional trade norms by basing tariffs on bilateral trade deficits rather than existing bilateral or multilateral trade agreements, creating significant market access volatility

Asian economies, for example, now face disrupted supply chains and risks to employment and exports as a result of the programme. In the latest revised tariffs announced on 7 July, the US plans to impose a 40 percent tariff on goods from Myanmar and Laos, 36 percent on Thailand and Cambodia, 35 percent on Bangladesh, 32 percent on Indonesia, and 25 percent on Malaysia. Meanwhile, several African countries, especially southern markets like South Africa, Lesotho, Mauritius, and Madagascar, are vulnerable to fiscal strain and job losses as a result. South Africa was among the 14 countries to receive new tariff rates on 7 July, facing a 30 percent duty, alongside Tunisia, which faces a 25 percent rate.

In the Middle East, the potential impact is mixed. Based on the initial programme, Saudi Arabia, the United Arab Emirates (UAE), and Türkiye are subject to a baseline 10 percent tariff, while Morocco and Jordan face tariffs up to 20 percent, despite existing free trade agreements with the US. Although energy exports have been spared, the tariff programme will have a detrimental impact on already fragile economic environments in the Middle East region. Overall, the proposed programme’s opaque criteria and aggressive stance have unsettled global trade, and with few agreements resolved, uncertainty will persist well beyond the 1 August implementation date.

Targeting China: A centrepiece of the tariff strategy

A central objective of the Trump administration’s trade doctrine has been the containment of China’s expanding role in global supply chains and its dominance in the export market, valued at over USD 3 trillion annually. Since February, the US government has implemented a rolling series of punitive tariffs on Chinese goods, including a sweeping 10 percent hike on all imports, followed by an additional 20 percent punitive “fentanyl tariff”. By 9 April, as the reciprocal tariff programme launched in earnest and a tit-for-tar tariff dispute kicked off between the two major global players, Chinese imports were subject to cumulative US tariffs of up to 145 percent. Temporary relief came on 14 May following bilateral discussions in Geneva, which reduced tariffs to a standard 10 percent for a 90-day period, preserved the fentanyl-related levy, and maintained a separate 20 percent duty (stemming from a 2018 investigation into China’s trade practices). This effectively locked in a 30 percent average tariff on Chinese goods.

Although this step dialled down short-term volatility, it has left unresolved the deeper issues of the US-China trade deficit, and China’s dominance within strategic mineral and technology supply chains. With the current agreement set to expire in mid August, in the absence of a broader deal, the tariff rate could snap back to higher levels almost overnight. As the world’s second-largest economy and top global exporter, China remains a critical node in international trade flows. Any sharp escalation in tariffs risks triggering widespread supply chain disruption, pricing volatility, and destabilising bilateral trade and global markets once more.

Winners, losers, and those in between

While China is perceived to bear the brunt of the targeted tariffs, other countries have navigated the US’ trade gauntlet with varying success. The UK secured a limited but favourable framework, locking in a 10 percent tariff and preserving critical exemptions for its automotive and aerospace sectors. Vietnam has followed suit with a trade framework set around a 20 percent rate, though with significant caveats, including a 40 percent transhipment duty designed to deter Chinese goods being rerouted through Vietnamese ports.

Yet for many emerging and frontier markets, the prospects are more uncertain. Small African economies such as Lesotho (facing a 50 percent tariff), Madagascar (47 percent), and Botswana (37 percent) are set to be among the worst affected. Despite attempts to secure waivers or carve-outs, many of these countries have not progressed beyond informal outreach with the USTR. South Africa, now facing a 30 percent tariff, which is set to have a severe impact on citrus and automotive exports, has warned of job losses and economic fallout, asking for a much-needed extension for trade talks. India, too, is at risk, with its high-performing pharmaceutical and auto-parts sectors exposed to a looming 26 percent tariff.

Securing deals: A volatile and unclear process

President Trump’s trade strategy blends high‐stakes brinkmanship, public shaming on social media, and a willingness to “just send letters” informing countries of their new rates rather than hammering out nuanced pacts. This approach has resulted in global trading partners grappling with a climate of deep uncertainty. While 1 August has been publicly declared as the latest cutoff for securing trade deals, President Trump has repeatedly suggested that it could be extended without warning, and most likely on a case-by-case basis. At the same time, President Trump has warned of new tariffs, including an additional 10 percent duty for countries aligned with the ‘anti-American’ policies of the BRICS bloc – a intergovernmental body comprising ten countries, namely Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the UAE. This unpredictability has left negotiators scrambling, unsure whether to finalise concessions or hold out for better terms.

The deals that have emerged so far offer little clarity. Rather than full-fledged trade agreements, they mostly consist of skeletal frameworks that establish baseline tariff levels while deferring critical details to future discussions, such as import quotas or product protections. Critics argue that these so-called frameworks lack the depth and legal certainty of traditional free trade deals, and may leave countries exposed to abrupt policy shifts down the line, as seen with Japan and South Korea.

Adding to the tension is Trump’s combative negotiation style. From publicly criticising Japan over rice imports, to lambasting France for its proposed digital services tax, or broadcasting a curated video on South Africa’s crime landscape, the administration has not hesitated to air grievances in full view. For smaller countries, Trump has openly stated his willingness to bypass negotiations altogether, opting instead to simply inform certain countries of their new tariff rate. This blunt, transactional approach – part bluster, part strategy, has unnerved both allies and rivals alike.

Regional Fallout: Africa and Asia in the crosshairs

Africa has emerged as a disproportionate casualty of the current policy. Of the 57 country-specific reciprocal tariff notices issued in April, 20 targeted African economies. Beyond Lesotho and Madagascar, countries such as Mauritius, Botswana, Angola, Libya, South Africa, and Algeria all face tariffs upwards of 30 percent, despite relatively small trade volumes with the US. At the same time, these jurisdictions have had little time, access, or success in securing bilateral talks with Washington. This will result in several implications for the region. Even if these markets can secure new bilateral deals, the tariff program risks eroding the competitive edge African economies have enjoyed under the largely defunct African Growth and Opportunity Act (AGOA).

Instead, we are likely to see an acceleration in trade diversion towards Europe, Asia, and elsewhere. Indeed, China has already responded to Africa’s US tariff challenge by offering zero-tariff access to 53 African nations with which it maintains diplomatic ties, highlighting a growing bifurcation in global trade alignments. For the continent, Trump’s tariff regime is likely to only deepen longstanding diversification of trade partners. Amid US policy unpredictability and global supply chain shifts, Africa is deepening ties with emerging partners like India, the UAE, and Türkiye. These actors are investing in logistics, energy, digital technology, and infrastructure, aligning with Africa’s development goals. Furthermore, intra-African trade, boosted by the African Continental Free Trade Area (AfCFTA) integration, is projected to grow by 5.1 percent in both 2025 and 2026, and will further contribute to non-US trade growth. Amid this pattern, new US threats against the BRICS bloc such as those released on 7 July are also likely to deepen non-US ties.

While the initial rounds of the US-China trade war accelerated supply chain diversification toward Southeast Asian economies, the extension of duties to countries like Malaysia, Cambodia, Indonesia and others has exposed the region to direct tariff risk. Vietnam, once seen as a prime beneficiary of the “China plus one” strategy, now faces a 20 percent tariff on its exports, alongside a 40 percent transhipment duty aimed at curbing circumvention of Chinese tariffs. These measures risk undermining investor confidence and slowing manufacturing output.

Meanwhile, Asian economies such as Cambodia and Bangladesh, reliant on low-margin exports like textiles and facing new tariffs of 36 and 35 percent respectively, may not be able to absorb the impact of a loss of price competitiveness. The region is also likely to face additional pressure from China, as the dominant exporter looks for alternative markets for its goods, putting pressure on profit margins of domestic manufacturers. Overall, as an export oriented region, any notable tariffs on Asian exports could severely impact the region’s growth.

Commodity lifelines

Despite global uncertainty, the US has shown greater willingness to negotiate on a sectoral basis when strategic resource security is involved. Iraq, for instance, has floated proposals to exchange market access and enhance private sector cooperation, including in petrochemicals, for tariff relief on its nonenergy sector. Angola has also downplayed concerns over the proposed 30 percent tariffs, noting that the exemption for energy exports will protect its vital oil revenues.

Those jurisdictions also rich in critical minerals are likely to leverage access to these exempt resources for more favourable trade deals. As the Trump administration adopts a more transactional trade approach, access to strategic minerals such as lithium, cobalt, and rare earth elements has become a key bargaining chip. Countries like Indonesia have explicitly offered enhanced mineral access to the US in exchange for relief from steep reciprocal tariffs, recognising the US government’s urgency in countering China’s dominance in global supply chains. In Africa, countries such as the Democratic Republic of Congo (DRC) and Zambia are using their mineral wealth to extract better terms, from export restrictions to renegotiated processing quotas and bilateral frameworks linked to security cooperation.

These arrangements, while uneven in outcome, underscore how critical minerals are reshaping leverage in global trade diplomacy. For commodity dependent frontier markets, aligning trade and investment concessions with US strategic supply goals may offer the most realistic path to tariff mitigation.

What comes after 1 August?

With the deadline only marginally extended, a bifurcated US trade landscape seems the most likely outcome. The most probable scenario is that the US government will strike a handful of symbolic deals in the coming weeks, sufficient to claim success. Some countries will face automatic tariff reversion if no deal is reached, potentially upending trade flows overnight. Others may benefit from informal extensions or rolling negotiations, depending on perceived alignment with US priorities and diplomatic goodwill.

Critically, however, the US administration retains full discretion to interpret what counts as “good faith” engagement, creating further ambiguity for those in limbo. While large economies may absorb the shock or negotiate carve-outs, many smaller markets remain highly exposed. For them, the coming weeks to months offer not only risk, but also a call to reimagine their trading futures through diversification, integration, and strategic diplomacy.

For more information on this report or Pangea-Risk, contact [email protected]