Malawi could be remitting $7 million (about K12.3 billion) to the United States of America in potential custom duties annually from the reciprocal tariff of 18 percent announced on April 5 2025, but pending implementation, United Nations (UN) data has shown.
However, as a percentage of US total custom duties in 2024, this represents a meagre 0.01 percent.
Such tariffs, currently on pause for 90 days, were calculated at rates to balance bilateral merchandise trade deficits between the US and 57 of its trading partners, including Malawi.
The UN Trade and Development (Unctad) argues this would only threaten growth, investment and development progress for Malawi and other most vulnerable economies, including Mozambique, Madagascar, the Democratic Republic of Congo, Angola, Myanmar and Chad.
Unctad calculations based on US National Statistics based on 2024 data shows that Malawi’s US exports were at $27 million (about K47.3 billion).
Reads the report published on Monday: “As many of these economies are small in size, structurally weak with low purchasing power, they offer limited export market opportunities for the US.
“Any trade concessions they grant would mean little to the United States, while potentially reducing their own revenue collection.” .
Speaking to UN News on Tuesday, Unctad secretary general Rebeca Grynspan said that poorest countries, whose activities have a negligible effect on trade deficits, should be exempted.
She said: “Our first call is for rational decisions to be taken, so we can plan, strategise and adapt to change, but we still don’t know what that change will entail.
“There are a number of countries that don’t really contribute to the deficit, are not important in terms of the revenue [that the US can collect from tariffs] and are not competition or a national security threat to the US.”
The US policy of reciprocal tariffs has imposed new and burdensome market access conditions, affecting small, vulnerable economies and least developed countries (LDCs).
Many African countries, including Malawi, have benefited from preferential market access through initiatives such as the African Growth and Opportunity Act (Agoa), while small economies involved in US free trade agreements contribute negligibly to the US trade deficit.
However, beneficiaries of US unilateral preferences, such as Agoa are not exempted from reciprocity tariffs, meaning imports from these countries are now subject to additional 10 percent tariffs across the board, except for other exemptions.
Until they were paused on April 9, reciprocal tariffs would also have applied to Agoa beneficiaries.
Published Agoa data shows that as at 2022, of the $16.2 million (about K28 billion) generated from tobacco exports to the US, 95 percent of it was under Agoa and the rest under duty-free under normal tariff relations.
Similarly, tea, which generated $13.1 million (about K23 billion), was mostly exported duty-free, the same with sugar, which generated $10.4 million (about K18.2 billion).
In a written response on Tuesday, Illovo Sugar (Malawi) plc communications and stakeholder relations manager Olive Kawelama conceded that the sugar manufacturer and exporter used to access US market through Agoa and tariff rated quota designed to supplement US domestic production with a duty-free access to US market of 10 000 metric tonnes per year.
She said: “The new tax regime affects both tariff rated quota and Agoa. Although the new tariff regime will not affect the production cost of sugar, it will significantly impact the market price due to the higher landed cost resulting from the increased tariff.
“This in itself provides different landed costs for different sugar producers, entailing different competitive positions.”
Kawelama indicated that currently, the Malawi Stock Exchange-listed sugar manufacturer is failing to meet its quota due to supply constraints, having exported only 1 526 metric tonnes last year.
On his part, Minister of Agriculture Sam Kawale said on Monday that while government does not yet have information from buyers on the direct impact of the tariffs on Malawi tobacco, it is working on improving on tobacco quality to increase access to other market apart from the US.
Malawi’s exports to the US comprise mostly agricultural products such as tobacco, sugar, tea and nuts.
