How global trade tensions threaten workers—and what we can do to build a fairer future
By David Laguerre –
The High Cost of Trade Wars
The United Nations has sounded a stark warning: 7 million new jobs are at risk this year due to deepening trade wars. According to a report from the International Labour Organization (ILO), escalating tariffs and geopolitical tensions are disrupting global supply chains and dampening business confidence. This predicted shortfall means that workers in sectors such as manufacturing, agriculture, logistics, and retail are facing an uncertain future. While this forecast is alarming, there is also a growing consensus among economists and policymakers that proactive measures—such as investment in green and digital sectors, enhanced social protection, and workforce training—can help turn this crisis into an opportunity for economic renewal.
The UN’s Warning: 7 Million Jobs at Risk
The ILO report projects that, out of an estimated 53 million jobs to be created this year, 7 million will not materialize due to the ongoing trade war. The conflict, primarily between the United States and China, has resulted in a cascade of tariffs and retaliatory measures that have unsettled global trade. These tensions have led to a slowdown in worldwide GDP, now revised to 2.8%, and have placed particular pressure on sectors that rely heavily on international commerce.
“Trade wars exacerbate inequalities in the labor market, disproportionately affecting low-skilled workers in export-dependent industries. Governments must prioritize social protection measures to mitigate these impacts,”
explained the ILO Director-General.
This warning not only emphasizes the immediate economic disruptions but also signals long-term challenges, such as rising income inequality and the destabilization of vulnerable labor markets.
How Trade Wars Hurt Workers and Businesses
Manufacturing: Factories on the Front Lines
Manufacturing is one of the hardest-hit sectors in the trade war turmoil. Chinese factories have experienced a dramatic decline in export demand, resulting in an estimated loss of 1.5 million jobs during the peak of the US-China tariff battle. American manufacturers, facing higher costs as they depend on imported components, have been forced to shift production overseas. Companies such as Harley-Davidson have relocated their operations to avoid punitive tariffs, leaving domestic workers without jobs and compounding economic woes in communities dependent on factory work.
Agriculture: Farmers Caught in the Crossfire
Farmers in both developed and developing countries are also feeling the strain. When China imposed tariffs on US soybeans, American farmers saw their export markets shrink dramatically. Despite a government aid package of $28 billion, many small-scale farmers struggled to survive the financial onslaught. In countries like Sri Lanka, trade disruptions have hurt key export commodities such as tea, further jeopardizing rural economies that rely on agriculture.
Logistics and Retail: Ripple Effects Across the Economy
The ripple effects of the trade war extend well beyond production. Logistics companies have encountered significant challenges as businesses scramble to reconfigure global supply routes. Smaller enterprises, with fewer resources to absorb the increased costs, have been particularly vulnerable. In Europe, importers have seen a 15% rise in costs due to tariff adjustments, forcing retailers to reduce their workforce and shutter stores. As companies grapple with supply chain disruptions, consumers ultimately bear the full brunt of higher prices and diminished service quality.
Are the Predictions Overstated? Counterarguments and Hope
Some economists argue that while the UN’s forecast is concerning, it may overestimate the long-term fallout. The global economy has historically shown resilience in the face of upheaval. Adaptive measures—such as forging new trade agreements and diversifying supply chains—offer potential pathways for recovery. Displaced workers could transition to emerging sectors, particularly in fields like renewable energy and digital technology.
Critics also point out that the ILO’s analysis does not fully capture the informal economy, which represents 58% of global employment. By formalizing jobs and extending social safety nets, governments could reduce the severity of job losses in formal sectors. As one expert noted, “The challenge lies in not only mitigating the immediate impacts of trade disruptions but also in leveraging these disruptions into opportunities for sustainable growth.”
What Can Be Done? Solutions for a Fairer Future
Invest in Green and Digital Sectors
There is a promising opening in the shift towards green and digital economies. Currently, renewable energy supports over 16 million jobs worldwide. With further investments in solar, wind, and emerging hydrogen power technologies, millions more jobs could be generated. Equally, expanding digital infrastructure and skills training will help economies pivot toward high-tech industries, ensuring workers are prepared for future demands.
Expand Social Protection and Workforce Training
Expanding social safety nets is essential for cushioning vulnerable workers from abrupt job losses. Policies that improve access to healthcare, unemployment benefits, and affordable housing can provide a much-needed buffer during economic downturns. In tandem, robust reskilling and upskilling initiatives will equip the workforce for jobs in renewable energy, technology, and other emerging fields. These measures not only build resilience but also foster a more inclusive labor market.
Strengthen Global Cooperation
Trade wars stem from deeper disruptions in the international trading system. Addressing these issues requires a renewed commitment to multilateral cooperation and the reinforcement of a rules-based trading system. By resolving tariff disputes and supporting economies that are most at risk, world leaders can help create a more stable and inclusive global economic environment.
“The global trade war has highlighted the fragility of international supply chains and the need for a more inclusive and sustainable trade system that benefits all countries, particularly developing economies,”
Stated the UNCTAD Secretary-General.
Turning Crisis Into Opportunity
The UN’s ominous forecast serves as a crucial wake-up call. While the potential loss of 7 million jobs underscores the profound impact of trade wars, it also highlights the urgent need for transformative action. By investing in green and digital sectors, enhancing social protection, and committing to international cooperation, we have the power to reshape the future of work. This is a pivotal moment for policymakers, business leaders, and communities to come together and ensure the benefits of economic progress reach every corner of society. The choices made today will determine whether this crisis becomes a turning point for a more equitable, resilient global economy. Let us choose to build a future where opportunity prevails over uncertainty.
