The United Nations Conference on Trade and Development (UNCTAD) has issued a stark warning about the detrimental impact of new US tariff measures on vulnerable economies, including least developed countries (LDCs), small island developing States (SIDS), and landlocked developing countries (LLDCs).
These economies, which already struggle to participate in the global economy, face significant risks to their development as vital exports are threatened by escalating trade barriers.
Despite accounting for only 2.7% of global exports and contributing a mere 0.3% to the US trade deficit, vulnerable economies are set to bear some of the highest new tariffs under recent US Presidential actions. For example, least developed countries face trade-weighted tariffs of up to 43.9%, compared to just 5.1% tariffs imposed by these economies on US exports.
This disparity could severely undermine their competitiveness and development prospects.
The new tariffs, announced between January and May 2025, include country-specific measures of up to 50% for certain nations, such as Lesotho, Cambodia, and Madagascar.
These tariffs are temporarily on hold for a 90-day period but are expected to take full effect by July 2025.
Exemptions from these tariffs are limited, with only 7% of least developed countries’ exports to the US being spared, primarily focusing on primary goods such as mineral products, textiles, and machinery.
UNCTAD highlights that vulnerable economies rely heavily on the US market, with 8% of their total exports directed to the United States.
However, they make up only 1.6% of US imports, underscoring their marginal role in the US economy. The disproportionate tariff burden could lead to a decline in vital exports, further marginalizing these economies and jeopardizing their progress toward sustainable development goals.
The report calls for urgent action to spare vulnerable economies from these tariff burdens and protect their development.
UNCTAD emphasizes the need for equitable trade policies that align with the Sustainable Development Goal (SDG) target 17.11, which aims to significantly increase the exports of developing countries, particularly least developed countries.
