The United Nations Trade and Development agency, UNCTAD, is calling on US to waive tariffs for the world’s poorest economies, arguing it would have a negligible impact on US trade objectives. According to UNCTAD Secretary-General Rebecca Grynspan, exempting these countries would prevent significant economic harm while allowing the US to pursue its trade policy goals with minimal disruption.
The US initially imposed substantial tariffs, ranging from 11% to 50%, on 57 trading partners, including the European Union. However, a 90-day pause was later implemented for all countries except China, reducing the tariff rate to 10%. UNCTAD believes this pause presents an opportunity to shield vulnerable economies from tariffs that offer little benefit to US trade policy.
These economies, often small and impoverished with limited purchasing power, contribute minimally to the US trade deficit. In fact, 44 Least Developed Countries account for less than 2% of the US’s trade deficit. For 36 of the 57 trading partners, the new tariffs would generate less than 1% of current US tariff revenues. Some countries export unique products not produced in the US, such as Madagascar’s vanilla, which could become more expensive for consumers if tariffs increase.
UNCTAD’s recommendation aims to protect vulnerable economies while enabling the US to focus on more substantial trade relationships. By sparing these countries from tariffs, the US can avoid unintended consequences and promote more equitable global trade practices.
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