FX.co ★ Trump's tariff hammer: countries hit hardest

Lesotho

The small southern African kingdom of Lesotho is in a particularly vulnerable position: a new 50% tariff is the highest rate imposed on any country under the revised trade regime. Lesotho's economy heavily relies on textile exports to the United States, worth $240 million in 2024, almost entirely driven by outbound shipments to the American market. The tariff hike effectively nullifies the benefits of the African Growth and Opportunity Act (AGOA), which had granted preferential access to the US. Lesotho now risks a spike in unemployment, declining industrial output, and falling foreign exchange revenues.

Cambodia

For Cambodia, an export-driven economy in Southeast Asia, a 49% tariff could be devastating. The United States is its largest trading partner, accounting for nearly 38% of the country's external shipments. In 2024, Cambodian exports to the US reached $9.9 billion, consisting primarily of garments, footwear, and travel goods. The sudden tariff hike threatens the profitability of local manufacturers, jeopardizes employment in labor-intensive sectors, and could stifle export revenue inflows. Against the backdrop of tepid domestic demand, this new pressuring factor could slow the country's economic momentum.

Laos

Laos, the poorest nation in Southeast Asia, has been hit with a 48% tariff, posing a severe threat to its labor-intensive export sector. The country’s key shipments to the US include textiles, timber, and agricultural products. Given its extremely low income levels and limited domestic economic capacity, Laos will struggle to offset the losses. The new tariffs risk shutting down factories, slashing export revenues, and deepening poverty, especially in light of reduced US aid and China's growing influence in the region.

Madagascar

Madagascar, the island nation off the southeastern coast of Africa, now faces a 47% tariff, casting a shadow over its key export sectors such as textiles, vanilla, and mineral resources. In 2023, exports to the United States fell to $669 million, and the new tariffs are likely to accelerate this downward trend. Notably, nearly half of Madagascar's exports previously benefited from the African Growth and Opportunity Act (AGOA), but the new tariffs effectively negate those advantages. The country now faces mounting pressure on foreign exchange earnings, rising unemployment, and slowing economic growth.

Vietnam

A 46% US tariff on Vietnamese exports poses a serious challenge to one of Southeast Asia's most dynamic economies. The tariffs target core export categories such as light manufacturing, electronics, and furniture, much of which is destined for the American market. On April 3, Prime Minister Pham Minh Chinh held an emergency meeting with top cabinet members to draft a policy response aimed at renegotiating the tariff terms. Hanoi had previously reduced tariffs on US goods, but that goodwill was not enough to shield Vietnam from Washington's sweeping trade actions.