Many developing economies, including the Philippines, are expected to lose their competitiveness in the United States (US) market once the currently suspended tariffs imposed by the Trump administration are reinstated, according to the United Nations Conference on Trade and Development (UNCTAD).

Last month, President Donald Trump shifted the US’ tariff policy from being among the lowest in the world to suddenly among the highest, slapping all trading partners with new taxes.

During his so-called “Liberation Day” on April 2, Trump announced a universal 10 percent baseline tariff on all imports into the US, regardless of prior trade agreements or multilateral commitments.

Higher country-specific tariffs, labeled as reciprocal tariffs, were also employed as the United States moved to balance its trade deficits with other countries.

These significantly higher tariffs, which are feared to upend global trade, were supposed to be implemented on April 9 but have since been postponed for 90 days or until July 7.

During the initial announcement, the Philippines was subjected to 17 percent tariffs on the back of its US trade deficit of $4.9 billion.

In its report, UNCTAD said developing countries such as the Philippines often rely on a “narrow range of products and limited number of markets.”

UNCTAD, an intergovernmental body within the UN, supports developing countries in accessing the benefits of global trade. It states that tariffs are high trade barriers that can disrupt trade flows.

Essentially, this would make it more difficult for these countries to maintain market access and remain competitive across key sectors, further hurting their export prospects.

“These measures will raise the cost of market access—even for countries with minimal contribution to global trade imbalances,” the report read.

Based on data from the Department of Trade and Industry (DTI), the US accounted for 17 percent of the country’s total exports in 2024.

Electronic products such as semiconductors comprise 53 percent of these exports, equivalent to about 10 percent of the Philippines’ total trade with the US.

Imports from the Philippines into the US reached $14.2 billion last year, according to the Office of the US Trade Representative (USTR).

With the Philippines facing 17-percent tariffs, the second lowest in Southeast Asia, the government’s economic team is seeing a more advantageous position for the country.

With neighboring countries facing higher tariffs, the Philippines could take advantage of US firms looking for the best possible deal.

Even then, the government is still exploring the potential to lower these tariffs by facilitating greater market access for US goods, such as automobiles and dairy products.

A delegation of the country, featuring Department of Trade and Industry (DTI) Secretary Christina Roque and Special Assistant to the President for Investment and Economic Affairs Secretary Fredrick Go, recently engaged with USTR Jamieson Greer to negotiate for a lower tariff rate.

While details of the negotiation were not disclosed, Roque said the meeting “went very well,” with the country’s assertions “well received.”

In previous statements, Roque floated the possibility of facilitating greater market access for US goods such as automobiles and dairy products.

She likewise said the country may opt to import a higher volume of commodities such as frozen meat and soybeans. The US accounts for approximately 20 percent of the country’s agricultural imports.

While there is optimism on the part of the Philippines, UNCTAD said vulnerable countries, which include landlocked developing countries, small island developing states, and least developed countries, are expected to bear the full brunt of the tariffs.

“These countries contribute minimally to US tariff revenue and only 0.3 percent to the US trade deficit,” it said.

As the 90-day tariff pause nears the halfway mark, the UN body is pushing the Trump administration to reevaluate the tariffs it will be imposing on its trading partners, particularly vulnerable economies.

It emphasized the need to safeguard sustainable development and avoid further economic instability.

“Sparing the most vulnerable economies from disruptively high tariff burdens should be a priority,” the report read.