New US tariffs threaten exports and development prospects of world’s most vulnerable economies

The world’s most vulnerable economies—least developed countries (LDCs), small island developing States (SIDS), and landlocked developing countries (LLDCs)—face mounting risks to their fragile export sectors as the United States prepares to implement sweeping new tariffs, according to a recent United Nations Conference on Trade and Development (UNCTAD) analysis.Despite accounting for 16.7% of the global population, these vulnerable economies contribute less than 2.7% of global exports, a share that has barely improved over the past decade. Their participation in world trade remains stubbornly low, even with longstanding provisions for special and differential treatment under international trade rules.The United States is a vital export market for many of these countries, yet their combined exports make up less than 0.5% of US imports and contribute just 0.3% to the US trade deficit. Still, under the new US tariff regime announced between January and May 2025, these economies could face some of the highest country-specific tariff rates—up to 50% for certain African and Asian LDCs.The new tariffs, currently on a 90-day pause until July 2025, would hit countries such as Lesotho (50%), Cambodia (49%), Madagascar (47%), and Mauritius (40%) especially hard. For many, these tariffs cover the bulk of their exports to the US, with only a small fraction—about 7% for LDCs—exempted from the new duties.Most exemptions focus on primary goods, such as minerals, textiles, and foodstuffs, but the majority of value-added products remain exposed. According to UNCTAD, only 1% of US imports exempted from tariffs in 2023 came from vulnerable economies.UNCTAD warns that higher tariffs could lead to a sharp decline in vital exports from these countries, undermining their economic growth and progress toward the UN Sustainable Development Goals (SDGs). The SDG target to double the share of LDCs’ global exports by 2020 has already been missed, and new trade barriers threaten to reverse even the modest gains made.The analysis highlights that the average US tariff on exports from LDCs could rise to nearly 44%, compared to just 7% on US exports to these countries. This imbalance could erode the competitiveness of dozens of vulnerable economies in key sectors such as textiles, machinery, and food products.