The United Nations Office on Trade and Development (UNCTAD) called for the most vulnerable economies to be exempt from the reciprocal tariffs imposed by US President Donald Trump , which were paused for 90 days.
In its report, ” Rising Tariffs: The Impact on Small and Vulnerable Economies ,” the United Nations agency noted that in many cases, reciprocal tariffs can cause significant impacts on developing and less-developed economies without significantly reducing the United States’ trade deficits or increasing revenue collection.
In this regard, he indicated that of the 57 affected trading partners , 11 of them are less-developed countries that contribute minimally to the United States’ trade deficits. “Twenty-eight of these 57 trading partners each represent less than 0.1% of the deficits, but could still be subject to reciprocal tariffs.”
Because many of these economies are small , structurally weak, and have low purchasing power, they do not really represent a solid export market for the United States.
The report stated that after the grace period, if reciprocal tariffs are reinstated, demand for various imported goods is likely to decline due to higher prices.
“Even if U.S. import levels were maintained at 2024 levels, the additional tariff revenue collected from the poorest and smallest economies would be minimal. For each of the 36 of the 57 trading partners, reciprocal tariffs would generate less than 1% of current U.S. tariff revenue,” he clarified.
The report estimated that increased tariffs on agricultural products will likely impact consumers, given the rising prices of these goods.
“In 2024, the United States imported vanilla from Madagascar worth approximately $150 million. Cocoa imports from the Ivory Coast were close to $800 million, while imports from Ghana were valued at approximately $200 million,” the agency noted.
The UNCTAD study noted that in 2023, around two-thirds of global trade was tariff-free, and warned that more aggressive tariff policies recently imposed by the world’s major economies are raising concerns about escalating trade tensions and their impact on developing countries.
It’s worth remembering that Donald Trump has initiated a tariff war with several countries. However, he himself suspended reciprocal tariffs for 90 days on April 9, except for China, a nation with which he is engaged in a dispute over the imposition of tariffs.
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