The most vulnerable economies will be the hardest hit by the tariff increases proposed by US President Donald Trump , warned the United Nations Conference on Trade and Development (UNCTAD) , which warned that the global trading system is entering a critical phase that threatens growth, investment and development progress for these economies.
“This harms the vulnerable and the poor,” said Rebeca Grynspan, Secretary-General of UNCTAD, adding that “trade must not become another source of instability. It must serve development and global growth.”
Uncertainty in trade and investment is becoming an obstacle to growth and planning, for both businesses and policymakers.
The United Nations agency indicated that just 10 of the United States’nearly 200 trading partners account for nearly 90% of its trade deficit. However, least developed countries and small island developing states, responsible for only 1.6% and 0.4% of the deficit, respectively, are being affected. “They will not help balance the trade deficit or generate significant revenue,” it noted.
Many low-income economies are now facing a “perfect storm” of worsening external conditions, unsustainable debt levels, and slowing domestic growth. Higher tariffs threaten to weaken investment and trade flows, adding uncertainty to an already fragile environment.
“This could erode confidence, slow investment, and threaten development progress, especially in the most vulnerable economies,” the organization stressed.
For UNCTAD, trade reform is indeed necessary, and it must be achieved through dialogue and negotiation. In this regard, it noted that trade imbalances, concentrated profits, and outdated rules must be addressed without sacrificing those least responsible. “This is a time for cooperation, not escalation,” Grynspan asserted.
“Global trade rules must evolve to reflect today’s challenges, but they must do so with predictability and development at their core, protecting the most vulnerable,” said the UNCTAD Secretary-General.
On April 2 , Trump announced a series of reciprocal global tariffs that will apply to products entering the United States from various countries around the world.
As part of this measure, a 10% tariff base was established for all goods entering the United States, and higher tariffs will be applied to imports from other nations.
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