UN trade agency urges US to spare vulnerable economies from tariffs

The UN Conference on Trade and Development (UNCTAD) on Monday urged the US to exclude the vulnerable and least developed countries from reciprocal tariffs, warning they could “devastate” economies while having minimal impact on US trade deficits. In a report, UNCTAD said 28 of the 57 countries targeted by the paused tariffs each contribute less than 0.1% to the US trade deficit, yet face steep tariff rates – up to 50%. Lesotho, Madagascar, and Laos are among the most affected nations. "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," UNCTAD said. The proposed tariffs were initially introduced to balance bilateral trade deficits and are currently on a 90-day pause. UNCTAD argued that reinstating them would do little to reduce deficits or meaningfully increase US revenue. For 36 countries on the list, the estimated tariff revenue would amount to less than 1% of current US customs income, the report said. The report also warned of potential knock-on effects for American consumers, as several of the targeted nations export agricultural products not produced domestically in the US -- such as vanilla from Madagascar and cocoa from Ivory Coast and Ghana.