E-Paper
Trump tariffs: What it means for different countries
Lesotho faces the highest tariffs from Trump at 50%, while other countries like Vietnam and China also see significant increases, complicating trade dynamics.
On face value, Lesotho is the worst affected country by Trump’s tariffs announced yesterday. The country will now face an adjusted reciprocal tariff of 50% from the US, which is the highest tariffs for a country Trump’s Executive Order has announced in its list of 57 countries. US’s goods trade deficit with Lesotho in 2024 was $234.5 million which is nothing compared to US’s total goods trade deficit of $1.2 trillion.
Extreme examples aside, the Trump administration has imposed significant tariffs on major trading partners of the US. For example, Vietnam now faces an adjusted reciprocal tariff of 46%. For China this number is now 34% (on top of a previously announced 20%). How will these reciprocal tariffs impact individual countries?
It is tempting to do a simplistic analysis by comparing something like a country’s exports to the US as a share of its total GDP. For example, US imported goods worth $136.6 billion from Vietnam in 2024. This is as much as 28.6% of Vietnam’s nominal GDP in 2024. China exported goods worth $439 billion to the US in 2024 but has a nominal GDP of $18.5 trillion,which means the impact could be as little as 2.4% of GDP. However, such comparisons could be completely misleading because of various complications in how these tariffs will play out in the real world.
For example, a lot of Chinese exports to other countries become a part of global value chains which eventually culminate being exported to the US. “In 2024, Vietnam with a trade surplus of $123.5 billion with the US came in fourth place behind China: $295.4 billion, European Union: $235.6 billion and Mexico: $171.8 billion. Vietnam is a major player in manufacturing trade. A lot is made of the fact that Vietnam’s exports are not “really” Vietnamese. Vietnam, it is alleged, is acting as a conduit for manufacturing and trade from China. And it is true that there is a striking correlation between Vietnamese imports from China and exports to the US”, Adam Tooze, a professor at Columbia University wrote in his newsletter.
Similarly specific countries could end up with lower effective tariff rates because of commodity-group wise exemptions from reciprocal tariffs in Trump’s executive order. When read with the fact that the Trump administration will hold widespread negotiations with countries about these tariffs, the country-wise impact could become even more complicated.
