How US President Trump has targeted poorest countries with high tariffs

US President Donald Trump’s tariffs have roiled markets and shocked leaders the world over.

Trump on April 2, which he described as ‘Liberation Day,’ announced sweeping tariffs on dozens of nations.

Trump imposed what he claims are ‘reciprocal tariffs’ of 34 per cent on China, 20 per cent on the European Union and 27 per cent on India among others.

But no one has been hit harder by the new policies than the world’s poorest nations – many of them in Africa and Southeast Asia.

 Let’s take a closer look:

Madagascar

Take Madagascar, for example.

The East African nation, which exports, vanilla, metals and apparel to the US, faces a massive tariff of 47 per cent.

Little matter that it is one of the poorest nations in the world with a gross domestic product (GDP) per head of just over $500.

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In 2024, it exported just $733 million worth of goods to the US.

As per Time, the US comprises around 15 per cent of Madagascar’s total exports.

According to Globe and Mail, under 80 per cent of the population of Madagascar earns under $2.15 (Rs 183) per day.

“Presumably no one is buying Teslas there,” John Denton, head of the International Chamber of Commerce (ICC), said in an ironic reference to the improbability of Madagascar being able to placate Trump by buying upmarket US products.

Lesotho

Lesotho, in southern Africa was slapped with a tariff of 50 per cent.

As per Globe and Mail, Lesotho is a tiny, landlocked mountain kingdom in which one-third of all  children under the age of 5 suffer from malnutrition.

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Experts say the new tariff could leave Lesotho’s textile sector – the main source of employment – in shambles.

As per Time Magazine, diamonds, water, electricity, wool, and mohair are its other major exports

Lesotho imported only $2.8-million in American goods last year. This created a big trade surplus because its exports to the United States – mainly diamonds and textiles – totalled $237-million in the same year.

“It is a tiny, landlocked, mountainous country with less than 2,000 kilometres of paved roads – it’s not a surprise this isn’t a big market for big American imported pickups or SUVs,” Chris Roberts, an Africa specialist and research fellow at the Canadian Global Affairs Institute, told the newspaper.

The textile industries of Lesotho and Madagascar both were given US trade privileges under the African Growth and Opportunity Act (AGOA).

However, under the scheme, both nations are required to make widespread use of US materials in their clothing factories.

Cambodia

The Trump administration announced a 49 per cent for Cambodia.

As per Time, the nation in Southeast Asia imported goods worth $321.6 million from the US.

The US, on the other hand, imported goods worth $12.7 billion from Cambodia.

Cambodia sends around 40 per cent of its total exports to the US.

Its main exports are apparel, footwear, and travel goods.

Laos

Laos, also in Southeast Asia, is a country of just 7.5 million people.

The Trump administration has seen fit to levy a 48 per cent tariff on Laos.

As per BBC, the landlocked nation is one of the poorest and least-developed nations in the entire region.

The country suffers massive public debt and inflation, budget cuts, and currency depreciation.

As per Time Magazine, Laos in 2024 imported goods worth $40.4 million from the US, while exporting goods worth $803 million.

Laos’ main exports to the US comprise telecommunications equipment, cellphones, household goods, and television and video equipment.

Sudan and South Sudan

Even the war-ravaged countries of Sudan and South Sudan were not spared – both are now facing 10-per-cent tariffs.

“The biggest losers are Africa and Southeast Asia,” Denton added.

He said the move “risks further damaging the development prospects of countries already facing worsening terms of trade.”

Sri Lanka

Sri Lanka, which is still bouncing back from a fiscal crisis, was hit with a tariff of 44 per cent.

As per Time Magazine, the US exported goods worth $368.2 million from Sri Lanka while importing products worth $3 billion.

Syria

Syria, which is dealing with a civil war and refugee crisis, got a tariff of 41 per cent.

The US exported goods worth $2 million from Syria while importing material valued at $10.7 million.

Iraq

Iraq, one of the poorest countries in the world whose main export is crude oil, was slapped with a tariff of 39 per cent.

Iraq sent goods worth $7.4 billion to the US, while the US imported materials worth $1.7 billion.

Guyana

 Guyana received a tariff of 38 per cent from the Trump White House.

As per Time Magazine, it mainly sends crude petroleum to America.

In 2024, Guyana imported US goods worth $1.32 million, while exporting goods worth $5.375 billion.

 Bangladesh  

Bangladesh is facing a 37 per cent tariff from America.

 As per Time Magazine, Bangladesh exported goods worth $8.4 billion from the US and imported goods worth $2.2 billion.

The US is one of Bangladesh’s major markets for ready-made garments.

Experts say the new tariffs could hurt Bangladesh’s market share of textiles in America – which is around six per cent.

Botswana

 A tariff of 37 per cent was levied on the African nation of Botswana.

As per Time Magazine, Botswana faces high levels of poverty and unemployment.

It mainly exports diamonds.

Botswana exported goods worth $405.1 million to the US and imported goods worth $104.3 million.

Myanmar  

Myanmar is facing a tariff of 44 per cent from the US.

 Myanmar exported goods worth $656.5 million to the US and imported goods worth $77 million.

The Trump formula

The math is simple: take the US goods trade deficit with a country, divide it by that country’s exports to the US and turn it into a percentage figure; then cut that figure in half to produce the US “reciprocal” tariff, with a floor of 10 per cent.

That’s how the volcanic Australian territory of Heard Island and McDonald Islands in the Antarctic ended up with a 10 per cent tariff. The penguins got off lightly, you might say.

But the formula is also sowing confusion among rich countries. For the European Union it has produced a punitive tariff of 20 per cent — four times the 5 per cent which the World Trade Organisation calculates as the EU’s average tariff rate.

“So, at least for us, it is a colossal inaccuracy,” said Stefano Berni, General Manager of the consortium representing makers of the Grana Padano speciality cheese in Italy.

“It costs us three times as much today to enter the US as it does for US cheeses to enter our market,” he said in a statement.

The full list of economies that Trump announced will have at least 10 per cent tariffs or higher applied.

Asked about its methodology, White House Deputy Press Secretary Kush Desai posted on X that “we literally calculated tariff and non-tariff barriers” and included a screenshot of a White House paper setting out the algebra behind the formula.

Asked on CNBC how the Trump administration came up with the formula, Commerce Secretary Howard Lutnick did not directly explain it but said United States Trade Representative (USTR) economists had worked for years on a metric that reflected all trade barriers set up by a given country.

But economists across the world rushed to point out that the terms cancelled each other out in such a way that it could be reduced to a simple quotient of goods trade deficit over goods trade exports.

“There is really no methodology there,” said Mary Lovely, Senior Fellow at the Peterson Institute. “It is like finding you have cancer and finding the medication is based on your weight divided by your age. The word ‘reciprocal’ is deeply misleading.”

Robert Kahn, managing director, global macro for Eurasia Group consultancy, agreed that it produced “a lot of these kind of nonsense numbers that aren’t material”.

“It sends a signal … that we are pulling back from our relationships and alliances with them and is a cold shower to a lot of our traditional allies,” he said.

Others noted that it also raised questions over the widely held view that Trump is launching an opening gambit in what will be one-on-one discussions with individual countries that will ultimately see the new US tariffs sharply reduced.

“The US has chosen a methodology that is essentially mechanical,” said Stephen Adams, a former European trade adviser who now works for Global Counsel consultancy.

“One practical question it does raise is whether there’s any scope to negotiate this away … The US hasn’t identified any specific measures that might be changed in order to convince the president to change his mind.”

With inputs from agencies