The U.N. Trade and Development agency has urged the U.S. President Donald Trump’s administration to consider exempting the poorest and smallest economies from reciprocal tariffs. These tariffs, ranging from 11% to 50%, were imposed on 57 trading partners by Trump on April 9, but a pause was initiated for 90 days shortly after, except for China. The agency, known as UNCTAD, believes that excluding these small and vulnerable economies and least developed countries from the tariffs would have little impact on U.S. trade policy objectives while preventing potential economic harm abroad.
UNCTAD highlighted that some of the countries facing reciprocal tariffs above 10% are economically poor and have limited purchasing power, offering minimal export market opportunities for the United States. Therefore, trade concessions from these partners would not significantly benefit the U.S. while potentially reducing the partners’ revenue collection.
Trump’s decision to pause the tariffs aims to facilitate negotiations to reduce foreign tariffs and trade barriers. UNCTAD further pointed out that for 36 of the trading partners, the new tariffs would generate less than 1% of current U.S. tariff revenues. Additionally, several of the targeted partners export agricultural commodities, such as vanilla from Madagascar and cocoa from Cote d’Ivoire and Ghana, which are not produced in the United States and have few substitutes. Increasing tariffs on these goods may lead to higher prices for consumers.
The agency emphasized the importance of considering the exemption of small economies and least developed countries from the reciprocal tariffs as a way to avoid negative economic consequences abroad.
