Tariff Shock: Poorest Countries Face Rising Trade Burden as Global Costs Surge

A sweeping wave of global import tariffs is threatening to upend trade dynamics — and the world’s most vulnerable economies may suffer the most. According to a new United Nations report, the rising costs could triple trade expenses for Least Developed Countries (LDCs) and small island nations by July 2025.

The UN Conference on Trade and Development (UNCTAD) warns that new tariffs imposed by the United States, starting at 10% in April and rising to over 25% for 22 developing nations by July, are disrupting long-standing trade agreements and bypassing World Trade Organization (WTO) rules. Even countries with historically preferential access are now exposed.

For smaller, less diversified economies, this marks a potentially devastating shift. UNCTAD estimates that tariffs for LDCs—already doubled in April—could surge from 16% to 44% by mid-year. These increases directly impact critical export sectors such as agriculture and textiles, where many developing countries rely for revenue and employment.

Who’s being hit the hardest?

• Asian and Oceanic developing economies are seeing tariffs climb from 13% to 24%.

• Latin America and the Caribbean face a jump from below 0.5% to over 13%.

• Sectors like agriculture and clothing exports face the steepest cost burdens.

The report emphasizes that even countries not involved in trade disputes with the U.S. are feeling the ripple effects. Although these nations account for just 0.3% of the U.S. trade deficit, they are being penalized under a broad policy approach that may stifle development.

UNCTAD warns that without corrective measures, these tariff hikes could deter foreign investment, reduce market access, and worsen income inequality among trading nations.

Policy recommendations from UNCTAD include:

• Targeted tariff exemptions for vulnerable economies

• Enhanced trade facilitation support

• Long-term investment in economic diversification

UNCTAD’s interactive report provides detailed forecasts, country-level tariff impacts, and visual tools to help policymakers prepare for the consequences.

As global trade tensions escalate, the message is clear: without special protections, the poorest nations may pay the highest price.