AMY GOODMAN: This is Democracy Now!, democracynow.org. I’m Amy Goodman.

Global stocks are continuing to fall, fears of recession of growing, after President Trump rejected calls to scale back his order to institute sweeping tariffs on most of the world. In Hong Kong, stocks fell today by 13% — biggest single-day drop since the 1997 Asian financial crisis. Taiwan’s main stock index had its worst day since 1990. On Wall Street, $6.6 trillion was wiped out on Thursday and Friday. Trump is defending his tariff plan, telling reporters, quote, “Sometimes you have to take medicine to fix something,” unquote.

But there appears to be growing divisions within the Trump administration over the tariffs plan. Trump billionaire adviser Elon Musk — the world’s richest man — says he wants to see the U.S. and Europe have zero tariffs. Musk has also publicly criticized Trump trade adviser Peter Navarro. Another billionaire Trump backer, Bill Ackman, was warning that Trump’s tariffs could lead to an “economic nuclear winter.”

For more on the impact of these tariffs, especially on the poorest countries of the world, we’re joined by Jayati Ghosh, economics professor at University of Massachusetts Amherst. She was previously an economics professor at Jawaharlal Nehru University in New Delhi, India, where she taught for 35 years. She’s joining us now from Delhi, from India.

Professor, welcome back to Democracy Now! Can you lay out what is the effect of the tariffs, as you see them, on the poorest countries of the world?

JAYATI GHOSH: Well, I think what’s really striking about this whole tariff policy is not just the sheer stupidity of it, which I think you’ve already highlighted the impact that is taking place in the rich countries, but the fact — the wanton cruelty of it, because the formula that’s used is bizarre. It has nothing to do with the actual kind of protection that these countries afford themselves. But many of them are really the poorest, most debt-stressed, most climate-impacted countries in the world. And to actually attack them in this completely unnecessary way is quite unbelievable.

In my own region, in South Asia, we have Sri Lanka — I’ve just come back from Sri Lanka — Bangladesh, Pakistan, which are facing very, very high tariff rates. They are all struggling with massive debt burden. They can barely generate enough foreign exchange to import the most essential items. They, on top of that, have to pay very, very heavy debt service, and they’ve not really managed significant restructuring. All of them are under IMF programs. And yet, you get then this completely unnecessary, wanton kind of attack on a little bit of foreign exchange that they’re generating, because the U.S. is a major market for all of them.

AMY GOODMAN: So, you have what some are calling Trump’s “shock and awe” trade policy, the imposition of punitive tariffs on developing countries where you are, across Asia, like 49% on Cambodia, 37% on Bangladesh, 48% for Laos. What exactly does this mean on their end in these countries, and what it means for people in the United States when those tariffs are imposed?

JAYATI GHOSH: Well, let’s take Bangladesh, Laos, Cambodia, Sri Lanka. They are dominantly garment exports. Now, this is a sort of labor-intensive activity that typically developing countries take up at the early stage of their development. It’s not going to shift to the U.S. And, in fact, the U.S. doesn’t want those jobs. So the whole idea that you will somehow attack these countries for just a little bit of very labor-intensive export that they must generate, because they’re all facing very severe crises of the other kinds that I mentioned, is really strange.

Now, garments are not just a significant export and source of foreign exchange, but they are major employers, and particularly of women. So, what we’re going to see now are significant layoffs. We’ve already seen people in Sri Lanka and companies in Bangladesh complaining that orders have stopped already, even before the tariffs actually come into effect, and that they’re going to actually have to lay off hundreds of thousands of workers, in some cases possibly millions of workers. And what that will do to economies that are already reeling, under severe crises — in Bangladesh, you already have political upheaval. In Sri Lanka, you have a new government after significant political upheaval. What that will do to all of these countries is actually quite terrifying.

AMY GOODMAN: Why do you think President Trump is imposing these, given this isn’t a situation where it hurts other countries but it really benefits the United States? I mean, he wasn’t explaining this weekend. He was out golfing.

JAYATI GHOSH: Well, I mean, it’s because there is no explanation. We now know what the formula is. It’s this completely ridiculous formula: the trade deficit that U.S. has with that country divided by the U.S. imports from that country divided by half. That’s nothing, right? So the maximal you could possibly impose is 50%. Some countries have got close to that, 48, 49%, like Cambodia, like Vietnam, which is ridiculous, because these are tiny, tiny amounts. For the U.S., it’s not even a drop in the ocean of their imports.

But because they have simply applied this across the board for all countries — somebody said that, basically, they obviously just asked ChatGPT or something to work this out, without thinking about the context or even what they want strategically from this. Because they just applied this across the board, all kinds of countries in Africa, in Latin America, in Asia are going to be suffering hugely. And that chaos is going to come even to countries that are not directly affected by very high tariffs. So, even countries that are facing, let’s say, only 10% tariff, like Nepal, or other countries that have got away with slightly lower rates, 20%, 25% — still high, but lower — are still going to actually face the fallout of this, because there is likely to be a global recession.

There is already so much uncertainty that people are canceling orders, companies are reducing investment plans. We’ve seen what’s happened to the stock market. We’ve seen what’s happened to oil price. These are all indicators that there is likely to be a dramatic global slowdown and recession. Now, that affects everybody. That affects even countries that didn’t get a major tariff hit. And so, all countries in the world, and particularly, as I mentioned, the poorest countries, who have a lot of difficulty generating dollars, are going to actually face a really major shock, which is completely man-made and unnecessary.

AMY GOODMAN: And can you talk about how this will impact workers, people around the world who work for U.S. companies?

JAYATI GHOSH: Oh, absolutely. It’s not just U.S. companies. It’s the companies that U.S. companies — you know, there are these value chains. So, all of the major garment producers, for example, are multinationals who outsource to local companies. All of them are being hit. But it’s not just that. It’s going to affect the supply chains in electronics. It’s going to affect the supply chains in a lot of the new machinery that is essential for, let’s say, the cars that Elon Musk wants to build, and so on. So, in fact, this is also going to come back to bite the United States.

AMY GOODMAN: And the U.S. ultimately putting tariffs on China of over 50%, and then China retaliating with over 30% tariffs, in this last minute?

JAYATI GHOSH: I think what’s really significant about the Chinese response is not just the tariff response, but the fact that they have put export bans on some critical raw materials of which they are currently the only global producer. And that’s going to affect all kinds of production, all of the new high-technology production that the U.S. wants to encourage. And where it feels that it wants to gain a technological advantage over China simply won’t happen. Everything from EVs to solar panels to you name it, defense equipment, etc., all of this is going to be affected.

So, it’s been a remarkably stupid strategic move by Trump.

AMY GOODMAN: In the last — 

JAYATI GHOSH: But I will — 

AMY GOODMAN: Go ahead.

JAYATI GHOSH: No, I just wanted to say that there’s a silver lining in this for developing countries, which is that for too long, for maybe three decades, we’ve been told that the only way we can develop is through export-led growth. And that’s really — it’s been unfortunate, because we have never seen giving our own workers a fair deal as a good option. We’ve always seen wages as a cost, not as a source of our own domestic demand and market.

It’s now time to actually change, to shift gears, to think about different trading arrangements, more regional arrangements, looking at other developing countries as markets, looking at our own population as markets, and thinking about the things we can do to create sustainable production, that’s not ecologically damaging, that actually provides living wages and decent working conditions within our own countries.

AMY GOODMAN: We have to leave it there. Thank you so much, University of Massachusetts Amherst professor Jayati Ghosh, speaking to us from New Delhi. I’m Amy Goodman.