Recent US tariff changes have altered global trade dynamics, creating a more differentiated tariff structure.
This shift has impacted developing countries the most, widening their competitive disadvantage.
While some sectors see opportunities, the overall effect is a complex reallocation of market shares, urging countries to monitor and adapt to these changes.
Recent tariff adjustments by the United States have significantly altered competitive conditions in global export markets, moving from largely uniform treatment of trading partners to a more differentiated tariff structure, according to a new Global Trade Update from UN Trade and Development (UNCTAD).
The report, Who wins when trade policies shift?, showed that changes in trade policy generate gains and losses among exporters by modifying relative prices and market access conditions. As tariff levels diverged across suppliers, exporters’ relative competitiveness in the United States market shifts accordingly.
In 2024, nearly two-thirds of United States imports entered under World Trade Organization most-favoured-nation (MFN) tariff rates. By early 2026, however, average applied tariffs had increased by nearly 15 percentage points, and only about 20 per cent of imports were subject to MFN or duty-free rates.
This marks a shift toward a more differentiated tariff structure shaped by reciprocal measures, bilateral arrangements, sector-specific policies and targeted exemptions. While tariffs have risen across all major sectors, the magnitude of increases and the degree of variation across suppliers differ substantially.
For example, tariffs on iron and steel rose sharply but in a relatively uniform manner across exporters, limiting dispersion. By contrast, chemical products experienced more moderate increases overall but much wider variation across trading partners, creating sharper differences in competitive conditions.
The report highlighted how changes in relative tariff treatment affect exporters differently across sectors. In wine, wool and rice markets, relative tariff positions shifted markedly between February 2024 and February 2026.
For example, United States imports of South African wine are now roughly 17 percentage points more expensive relative to other wine exporters than in 2024. In rice, imports from Italy have become about 12 percentage points cheaper relative to other suppliers.
Among rice exporters, India’s relative tariff position deteriorated between 2024 and early 2026, as reflected in the change in relative preferential margins shown in the report’s data.
The exposure to tariff changes varies across country groups. On average, developed economies face smaller tariff increases and export a relatively lower share of their goods to the United States. Developing economies face larger average tariff increases and send a higher proportion of exports to the US market, making them more exposed to changes in United States trade policy.
The report showed that the relative tariff disadvantage of developing economies widened from approximately one percentage point in 2024 to nearly three percentage points by early 2026. Developed economies, which previously held an average tariff advantage of about 1.5 percentage points, saw this margin increase by roughly 2 percentage points. Least developed countries (LDC), previously in a broadly neutral position, now face an estimated relative disadvantage of around two percentage points, though the renewal of the African Growth and Opportunity Act has mitigated part of this impact.
Tariff increases are also highly uneven across individual economies. While about 37 economies, mostly developing countries including 10 LDCs, faced average tariff increases of less than five percentage points, a significant group experienced increases exceeding 20 percentage points. For two LDCs, the increase surpassed 35 percentage points.
Competitiveness effects vary widely across sectors. Developing economies showed notable losses in relative competitiveness in cereals, oilseeds, machinery and plastics, while LDCs gain in some agricultural and resource-based sectors but lose ground in several manufactured goods.
Despite overall pressures, uneven tariff adjustments can create openings, according to the authors of the report. They estimated that around three-quarters of United States trading partners could see some degree of improvement in their relative tariff position, while roughly one-quarter may experience a decline.
Large and uneven tariff shifts may allow countries to gain footholds in specific product lines where competitors face steeper increases. Some LDCs have seen gains in sectors such as tobacco, cotton, rice, palm oil and certain garments, reflecting how differentiated tariffs can generate sector-specific opportunities.
In this shifting environment, UNCTAD stressed the importance of monitoring tariff changes, assessing relative competitiveness and exploring export diversification where market access becomes more restrictive, while also taking advantage of improved preferential positions where they arise.