By Sharon Atieno
The United Nations Trade and Development (UNCTAD) has called for the exemption of vulnerable countries from new tariff hikes, noting that they are already grappling with low growth and mounting uncertainty and their activities have a negligible effect on trade deficits.
This follows US President Donald Trump’s new import taxes on goods entering the US. Based on the country’s Reciprocal Tariff policy, a policy to rebalance global trade flows by imposing an additional tax on imports from US’ trading partners, he has imposed a baseline tariff of 10% on all imports.
The UN trade body says, such tariffs, currently on pause for 90 days, were calculated at rates to balance bilateral merchandise trade deficits between the US and 57 of its trading partners – ranging from 11% for Cameroon to 50% for Lesotho.
UNCTAD’s report entitled “Escalating tariffs: The impact on small and vulnerable economies”, finds that in many cases, reciprocal tariffs risk devastating developing and least developed economies without significantly reducing US trade deficits or increasing revenue collection.
The report notes that 28 of these partners contribute less than 0.1% to the total US trade deficit. These include Namibia, Cameroon, Zambia, Democratic Republic of Congo, Mozambique, Equatorial Guinea, Chad, Malawi and Zimbabwe, among others.
As many of these economies are small in size, structurally weak with low purchasing power, they offer limited export market opportunities for the US. “Any trade concessions they grant would mean little to the United States, while potentially reducing their own revenue collection,” the report highlights.
Further, if the reciprocal tariffs kick in again, demands for many imported goods are likely to decrease because of higher prices. Even if US import levels were to remain at 2024 levels, additional tariff revenue collected from poorer and smaller economies would be minimal.
The report finds that for each of the 36 of the 57 trading partners, the reciprocal tariffs would generate less than 1% of US current tariff revenues (at approximately $83 billion in 2024).
This means the total contribution of these 36 economies would be some $4 billion, or about 5% of what the US collected in custom duties in 2024.
Notably, the report finds that several countries facing potential reciprocal tariffs export agricultural commodities the US doesn’t produce, for which there are few substitutes. These include vanilla from Madagascar or cocoa from Côte d’Ivoire and Ghana.
In 2024, the US imported vanilla worth approximately $150 million from Madagascar. Cocoa imports from Côte d’Ivoire were close to $800 million, while imports from Ghana were valued at about $200 million.
“Increasing tariffs on these goods, despite possibilities to add some revenues, is likely to result in higher prices for consumers,” UNCTAD says.
