UN Trade Agency Calls on US to Exempt Vulnerable Economies from Tariffs
The United Nations Conference on Trade and Development (UNCTAD) has called on the United States to exempt vulnerable and least developed countries from planned reciprocal tariffs, cautioning that such measures could severely damage fragile economies without significantly reducing the US trade deficit.
In a report published Monday, UNCTAD noted that 28 of the 57 countries affected by the suspended tariffs each contribute less than 0.1% to the US trade deficit, yet still face punitive rates as high as 50%. Countries like Lesotho, Madagascar, and Laos are among the most exposed. UNCTAD highlighted that these economies are small, structurally weak, and offer minimal export potential for the US, meaning any trade concessions from them would be largely symbolic while hurting their revenue streams.
Originally designed to address trade imbalances, the tariffs are currently under a 90-day suspension. However, UNCTAD argued that reinstating them would have little fiscal benefit for Washington. For 36 of the affected countries, the total estimated tariff income would be less than 1% of current US customs revenue.
The report also warned of negative consequences for US consumers, as many of the targeted countries supply agricultural goods not produced in the US — including vanilla from Madagascar and cocoa from Ivory Coast and Ghana — potentially leading to higher prices and limited availability.
