From the very beginning of his presidency, Donald Trump wielded tariffs like a weapon, launching a sweeping global trade war against America’s key trading partners.
Under the banner of “correcting trade imbalances, protecting domestic industries, and countering unfair trade practices,” Trump’s policy in fact marked the resurgence of global protectionism — shaking the very foundations of the free trade system the U.S. itself once championed.
Caught in this geopolitical crossfire is Papua New Guinea, a relatively small economy now feeling the dual impact — both visible and hidden.
Visible Impact: Direct Tariff Shocks
The Trump administration imposed a 10% tariff on PNG exports to the U.S., covering key cash crops such as coffee, cocoa, vanilla, antiques, and crustaceans — all of which are vital sources of foreign exchange for PNG. Notably, mineral exports like copper were excluded, revealing continued American dependence on such industrial resources.
According to data from PNG’s National Trade Office, bilateral trade between PNG and the U.S. reached USD 190.3 million in 2023, with PNG exporting USD 80.3 million and importing USD 110 million from the U.S., leaving PNG at a disadvantage in trade terms.
Previously, PNG benefitted from duty-free access under the WTO’s Generalized System of Preferences (GSP). Now, that privilege has been abruptly revoked — a stark shift that leaves PNG exposed.
Faced with this, Minister for International Trade and Investment Richard Maru and his technical team are evaluating options. For a smaller economy like PNG, retaliatory tariffs would carry more symbolic than practical weight. Instead, Maru advocates for a “soft power” strategy — leveraging diplomacy, regional positioning, and strategic negotiations to protect national interests.
Hidden Impact: Shifting Global Order
The deeper concern is structural — Trump’s move signals a retreat from multilateral trade systems, of which the U.S. was once a key architect. As the founder of the GATT (1947) and the WTO (1995), America long projected itself as a defender of “free, fair, and open trade.” That image is now in tatters.
The “America First” doctrine has already triggered countermeasures from major economies — China, the EU, Canada, Japan, and Australia — disrupting global supply chains and dampening investment sentiment.
For developing nations like PNG, especially open and resource-dependent economies, the fallout can be severe. If mismanaged, PNG risks losing even more bargaining power in international markets.
Turning Crisis into Opportunity
But even within this crisis lies opportunity. Strategic exports — copper, gold, nickel, cobalt — remain untouched by new tariffs. This gives PNG leverage in upcoming negotiations, especially as the U.S. continues to rely on imports of critical minerals and pharmaceutical inputs.
At the same time, the U.S. is expanding its Lombrum Naval Base in Manus, signaling PNG’s rising value in the Indo-Pacific security framework. Amid intensifying U.S.-China competition, PNG, if shrewd, can transform its passive role into a more active, strategic positioning, possibly even reaping benefits from both sides.
More Than Trade: A Geopolitical Chessboard
Ultimately, this isn’t just a trade issue — it’s geopolitics in motion. PNG must look beyond short-term trade numbers and understand the broader shifts in global power dynamics.
If PNG plays its cards wisely, this tariff battle won’t just make it a victim. It could become a calculated player — and even a quiet winner — in a complex game of global interests.
