UN calls on Trump to exempt poorest countries from ‘reciprocal' tariffs

The Guardian

14-04-2025

The UN's trade and development arm, Unctad, is calling on Donald Trump to exempt the world's poorest and smallest countries from 'reciprocal' tariffs, or risk 'serious economic harm'.
In a report published on Monday, Unctad identifies 28 nations the US president singled out for a higher tariff rate than the 10% baseline – despite each accounting for less than 0.1% of the US trade deficit.
These include Laos, which is expected to face a 48% tariff; Mauritius, on 40%; and Myanmar, to be hit with 45%, despite recovering from a devastating earthquake.
The White House shocked many developing countries with the punitive tariff rates announced this month.
Trump claimed rival economies had 'looted, pillaged, raped, plundered' the US with unfair trade practices, and he wanted to create a level playing field.
Unctad points out that many of the countries targeted with high tariff rates are unlikely to be a threat to the world's largest economy, given their small size and modest levels of exports.
The White House last week put the higher tariff rates on pause for 90 days, after unleashing chaos on world financial markets, leaving a 10% levy in place across the board.
But the administration's formal position remains that the 'reciprocal' tariff rates will come into force, subject to negotiations.
'The current 90-day pause presents an opportunity to reassess how small and vulnerable economies – including the least developed countries – are treated,' Unctad suggests.
'This is a critical moment to consider exempting them from tariffs that offer little to no advantage for US trade policy but risk causing serious economic harm.'
Unctad's analysis points out that many of these economies are so small that they are likely to generate little demand for US exports, even if they lowered tariffs, as the White House appears to be demanding.
Malawi, facing 18% tariffs, bought just $27m of US exports last year; Mozambique, which faces 16% tariffs, $150m; Cambodia, set for 49% tariffs, $322m.
And Unctad's experts also point out that 36 of these small and poor countries are likely to generate less than 1% of total US tariff revenue, even if the US does not cut imports from them as the tariffs take effect.
Part of the logic of the tariff policy is meant to be to bring manufacturing jobs back to the US. But for several tiny countries, their key exports are agricultural commodities, for which the US is unlikely to be able to find substitutes elsewhere – let alone develop a domestic industry.
Unctad highlights the $150m in vanilla imported from Madagascar, close to $800m in cocoa from Côte d'Ivoire and $200m in cocoa from Ghana.
With Madagascar set to face 47% tariffs, for example, the report argues that the main impact on the US is likely to be higher prices for consumers.
Some of the countries hit by the 10% tariffs – and set to face higher rates when the pause is over – were previously beneficiaries of a US policy called the African Growth and Opportunity Act (Agoa).
The scheme had been in place since 2000, and gave sub-Saharan African countries tariff-free access to US markets in order to encourage economic development. As many as 32 countries were eligible, before Trump's announcement appeared to tear up the scheme.
Financial markets and manufacturers in developing countries are continuing to wrestle with the changeable nature of US trade policy.
Trump sowed fresh confusion over the weekend by appearing to revisit an announcement made on Friday, that some hi-tech goods, including laptops, would be exempt from tariffs.
In a post on his social media site Truth Social on Sunday, the president said no one was getting 'off the hook', and the administration would be investigating the 'whole electronics supply chain'.