Tariff Shock Opens Door for Emerging Economies

Days after U.S. President Donald Trump announced a sweeping round of tariffs, which jolted markets and strained relationships with key allies like the European Union, Japan, and South Korea, a select group of emerging economies may stand to benefit—albeit cautiously, as fears of a tariff-driven recession linger.

The new U.S. tariff regime, set to take effect on April 9, imposes 20% or higher duties on major trading partners. However, countries such as Turkey, India, Brazil, Egypt, Morocco, and Kenya, with more modest tariff levels—often around 10%—are eyeing the turbulence as a window of opportunity.

Egypt Sees Textile Boost Amid Competitor Setbacks

While nations like Vietnam and Bangladesh, both large exporters with significant trade surpluses, are bracing for tariffs of 37% and 46%, respectively, others with trade deficits—including Egypt—are receiving relatively minor penalties.

“The U.S. didn’t impose tariffs on Egypt alone,” said Magdy Tolba, head of the Egyptian-Turkish joint venture T&C Garments.
“It imposed much higher tariffs on other countries. This gives Egypt a very good opportunity to grow.”

Tolba listed China, Vietnam, and Bangladesh as Egypt’s top textile competitors and urged local firms to seize the moment:

“The opportunity is in plain sight. We just need to grab it.”

Turkey Sees ‘Best of the Worst’ Tariff Impact

Although Turkey’s iron, steel, and aluminum exports were hit in earlier U.S. trade actions, the country now appears better positioned than many peers. With a 10% tariff, Turkey’s losses are relatively moderate.

Turkish Trade Minister Omer Bolat referred to the tariff level as “the best of the worst,” underscoring that Turkey’s position is favorable compared to heavily penalized markets.

Morocco Looks to Attract Investors via U.S. Trade Access

Morocco, which holds a free trade agreement with the United States, may become a new destination for foreign investors seeking low-tariff entry into the U.S. market.

“The tariff is an opportunity for Morocco to attract investments by foreign investors willing to export to the U.S., given the comparatively low 10% tariff,” said a former Moroccan official.

Still, the optimism is tempered by concerns over Chinese investment scrutiny. A recent $6.5 billion commitment from Gotion High Tech for Africa’s first gigafactory could draw unwanted attention from Washington.

Rachid Aourraz, an economist with the Moroccan Institute for Policy Analysis (MIPA), cautioned that the indirect effects of global recession risks could still harm Morocco’s economy:

“While the direct impact seems limited, the shockwaves created by the tariffs and the spectre of recession could impact Moroccan economic growth.”

Kenya’s Textile Sector Eyes Competitive Edge

In Kenya, a country where the U.S. enjoys a trade surplus, some exporters—particularly in textiles—believe the light tariff burden may provide an edge over harder-hit competitors.

Singapore Faces Trade War Spillover Despite Investment Hopes

Singapore’s Straits Times Index plunged 7.5%, its steepest drop since 2008, in reaction to the global tariff fallout. While the city-state may attract diversified investment flows, strict local content and manufacturing regulations remain a constraint.

“Singapore cannot win in a global trade war, given the heavy reliance on trade,” warned Maybank economist Chua Hak Bin.
OCBC economist Selena Ling added that benefits would be limited under current conditions.

India Seeks U.S. Market Share Despite 26% Tariff

Facing a 26% tariff, India still sees an opening to expand its U.S. exports in sectors such as textiles, apparel, and footwear. An internal government analysis reviewed by Reuters found India could gain ground as its Asian rivals absorb higher duties.

Following the announcement, India’s trade ministry said it was “studying the opportunities that may arise from this new U.S. trade policy.”

India is also attempting to expand iPhone production for the U.S. market, seeking to benefit from the shift away from China, though tariffs may still keep end prices high.

South America Eyes Revived EU Trade Talks Amid Tariff Chaos

In South America, where exports are dominated by commodities such as copper and grains, the Trump tariffs may spur renewed momentum in the long-stalled trade agreement between the Mercosur bloc and the European Union.