UNCTAD Calls for Exemption of Most Vulnerable Countries from Reciprocal Tariffs
A report from the United Nations Conference on Trade and Development (UNCTAD), published today, Monday, recommended that the most vulnerable economies of countries with little impact on the trade deficit should be exempt from new tariffs.
The report indicated that in many cases, reciprocal tariffs could lead to the destruction of the most vulnerable economies, which are already suffering from low growth rates and increasing uncertainty, without significantly reducing the U.S. trade deficit or increasing tax revenues.
For years, the rules-based global trading system has stimulated international trade and contributed to a gradual and steady decline in tariffs, taxes imposed by countries on imported goods. UNCTAD noted that nearly two-thirds of global trade occurred without tariffs in 2023.
These tariffs, currently suspended for 90 days, are calculated at rates aimed at balancing the bilateral trade deficit of goods between the United States and 57 of its trading partners, ranging from 11 percent for Cameroon to 50 percent for Lesotho.
The UNCTAD report highlights that the 57 affected trading partners, including 11 least developed countries, contribute minimally to the U.S. trade deficit.
UNCTAD believes that if reciprocal tariffs are re-imposed, the demand for many imported products is likely to decline due to rising prices.
