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Welcome to the latest edition of Frontier Markets News. As always, I would love to hear from you at [email protected] with news ideas, feedback and anything else you find interesting. 

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By Ken Stibler, Noah Berman, Nojan Rostami and Mariel Ferragamo. Executive editor: Dan Keeler

Africa

Trump tariffs spare none in Africa

The scale of US President Donald Trump’s expanded tariff strategy revealed this week caught many by surprise—not least some of Africa’s smallest economies.

Lesotho, a tiny country surrounded by South Africa, faces the heaviest new tariff of any country worldwide, after Trump hit it with a 50% levy. The US has a sizable trade deficit with Lesotho, from which it imports textiles and diamonds: last year, the US exported just $2.8 million worth of goods to Lesotho, but its imports amounted to $237.3 million. 

Other African countries facing substantial levies include Madagascar (47%), Mauritius (40%), Botswana (37%), and Nigeria (14%), the BBC reports. Madagascar’s major exports to the US are nickel and vanilla, while diamonds are a key export for Botswana. 

Analysts expect the fallout for export-dependent countries will be damaging economically, particularly for countries already contending with losing USAID support—although many analysts believe the move will backfire against the US by encouraging greater trade between emerging nations. 

Namibia strengthens collaboration with Russia on nuclear power

Namibia, Africa’s biggest producer of uranium, is looking to deepen ties with Russia to develop its role in the nuclear power supply chain, Bloomberg reports. During a meeting in Windhoek with Namibia’s President Netumbo Nandi-Ndaitwah, Russia’s deputy prime minister Yuri Trutnev said the two have “room for further development.”

Namibia’s growing partnership with Russia underscores a broader trend among African countries, embracing a Russian push for tighter economic and security ties, and turning away from historic Western bonds.

• Russia hosts top diplomats from Sahel countries for talks on boosting security ties (AP)

Namibia has long been seeking ways to develop its local mineral processing and refining industries rather than solely for mining to attract investment and spur job creation. It has also been courting other global partners, including China, to grow Namibia’s role in nuclear power supply chains. 

Asia

Asian FMs receive some of the highest Trump tariff rates

Frontier markets in Asia woke up to the news on Thursday that they had been hit the hardest by US President Donald Trump’s “reciprocal” tariffs, which will go into effect next week.

The rates have been met with consternation across the region. Thailand had been expecting an 11% tariff but received a 37% rate, Reuters reports. Vietnam received a 46% rate—among the highest globally. Tariffs could be particularly damaging for the country because it generates almost a third of its GDP from its $142 billion in annual exports to the US. Stocks in Vietnam fell 7% on Thursday, the largest single day drop in more than four years.

• Japanese PM to visit Philippines, Vietnam as Trump confounds Asian allies (Nikkei)

• Vietnam aims to blunt Trump tariffs with tax cuts on imports (Bloomberg)

In South Asia, garment makers Bangladesh and Sri Lanka received tariffs of 37% and 44%, respectively. The tariffs pose a severe threat to both countries’ economies, which rely heavily on exports to the US. “We will have to write our obituary notice,” a Sri Lankan garment industry consultant told the Straits Times.

But it is the region’s smaller economies that now find themselves between a rock and a hard place. Cambodia, for example, which is facing a rate of 49%, exported $10 billion to the US last year but has few resources to buy more American goods. 

Kazakhstan announces discovery of 20m-tonne rare earth deposit

Geologists in Kazakhstan have found an estimated 20 million metric ton deposit of rare earth metals, the Kazakh industry and construction ministry announced on Wednesday. 

The discovery, which has not been independently verified, would catapult Kazakhstan to near the top of a US geological survey list tracking the locations of such reserves. Only Brazil and China have larger known rare earth metals deposits.

But while the Kazakh site contains neodymium, cerium, lanthanum and yttrium, the country does not have the indigenous ability to extract them. The announcement came on the eve of the first ever EU-Central Asia summit in Uzbekistan, where Kazakhstan is seeking foreign investment, Eurasianet reports.

Myanmar announces three-week ceasefire after earthquake

The military junta ruling Myanmar announced on Wednesday that it would temporarily stop fighting armed rebel groups after a massive earthquake hit the country last weekend. The military declared a three-week ceasefire, according to state media.

The country’s exiled shadow government also announced a two-week ceasefire. Amnesty International said fighting has continued in spite of the two sides’ pledges.

The death toll from the quake is still being tallied but it is currently estimated that more than 3,000 people died. UN officials and aid agencies have said that a lack of clean water could create the conditions for disease, raising the risk of future epidemics. The US, historically a major partner in disaster relief, has been absent in Myanmar as a result of the Trump administration’s aid cuts. Chinese rescuers have been filling the gap, Reuters reports. 

Middle East

Trump’s tariff blitz targets weaker economies in Middle East

Some of the Middle East’s most fragile economies are among those hit hardest by US President Donald Trump’s sweeping tariffs announced this week. While Bahrain, Kuwait, Lebanon, Oman and Saudi Arabia will face only the baseline 10% tariff, Iraq will be charged 39%, Jordan 20% and Syria 41%, irrespective of whether they have a free trade agreement, Middle East Eye reports.

Jordan is hit especially hard, as it exports metals and fertilizers to the US on the basis of its free trade agreement. While it is a key security partner, it’s under significant pressure from the Trump administration to accept more Palestinian refugees, which it argues threatens its economic and political stability.

The sanctions on Syria, while significant on paper, will likely have little effect given that its economy is too underdeveloped to engage in meaningful trade, and its greatest source of foreign income—oil fields in its Kurdish-majority northeast—will benefit from an exemption granted for oil, gas, and refined products.

Saudi Arabia and Oman also benefit from the exemption, but the baseline 10% rate will apply to metals, technology and financial services—both key areas of public investment and pillars of their respective long-term economic diversification strategies. 

Syrian leader aims for inclusion with new cabinet

Syria’s transitional administration has reorganized into a new national government led by Ahmed al-Sharaa as President with a Cabinet drawn from the country’s diverse ethnic and religious groups, Reuters reports. Key roles such as minister of defense, foreign minister, and justice minister are filled by al-Sharaa’s close allies—drawn from the HTS rebel coalition that toppled former president Bashar al-Assad in December—but popular anti-Assad activists from civil society, including a woman who organized interfaith dialogues and the leader of the humanitarian group White Helmets, were also included.

In the new government, the president will wield significant power, such as being able to appoint judges to the Supreme Court, and one-third of the members of parliament. The new constitution does, however, also stipulate separation of powers, an independent judiciary, and guarantees “freedom of opinion, expression, information, publication and press.”

The creation of a diverse government with buy-in from Syria’s ethnic groups, especially the Kurds, is one of several demands by the US and EU for fully-removing sanctions, which is a critical step for reconstruction and economic development efforts. Turkey has long backed al-Sharaa in Syria since his days as leader of HTS in Idlib, and was quick to applaud the new government, going so far as to take an interest in establishing air bases in Syria as a security guarantee. 

OPEC+ launches greater than expected production increase

The OPEC+ group of oil-producing countries wrong-footed markets this week with a larger-than-expected increase in production, Reuters reports. The announcement sent the Brent crude price down to $65 on Friday—a precipitous drop given it had opened the week at $75.

The group was initially expected to increase production by 135,000 barrels per day, but instead said it would raise output by 411,000 barrels per day from May.

The production increase was reportedly pushed forward by Saudi Arabia, driven largely by anger at countries including Kazakhstan and Iraq that failed to comply with earlier production cuts designed to prop up oil prices. Effectively starting a price war for market share, Saudi Arabia is apparently willing to take a loss now to retain its dominant position in OPEC, even though it needs oil at $90 to break even on its budget, which has been under significant strain due to higher than expected costs for its Vision 2030 megaprojects.

Europe

Uncertainty more harmful than tariffs for Balkan economies

US President Donald Trump’s new tariff regime has struck Balkan economies with varying force, with rates ranging from Serbia’s punitive 37% to the baseline 10% for Albania, Montenegro and Kosovo, European Western Balkans reports. The immediate economic impact, however, might be less severe than feared, as exports to the US represent a relatively small share of most Balkan nations’ total trade—just 2.1% for Serbia, 1% for Bosnia, and 1.9% for Albania.

The tariffs target specific industries rather than broadly devastating economies, affecting sectors such as Serbia’s tire and arms manufacturing, Bosnia’s defense industry, and North Macedonia’s tobacco and steel exports.

The greater challenge for these emerging economies lies in the uncertainty Trump’s protectionist policies has created, prompting some governments to take pre-emptive steps to minimize risks to their economies. Romania, for example, has already announced plans to develop state aid schemes to protect its automotive components and industrial equipment sectors.

Latin America

Latin America avoids worst of Trump tariffs

Latin America has emerged relatively unscathed from US President Donald Trump’s new tariff strategy, with most countries in the region receiving a minimal 10% baseline tariff, Latin Finance reports. Even Brazil escaped with the minimum tariff despite its large trade surplus with the US, while Mexican goods only face the higher 25% levy if they fall outside the USMCA agreement. 

This favorable treatment could create unexpected opportunities, including potential “triangulation strategies” where Asian products are re-exported to the US through Latin American countries, and accelerated nearshoring initiatives. The region’s position as a major commodity producer—particularly of copper, energy resources and lithium—provides additional insulation, with key exports exempted from retaliatory tariffs.

While the region’s markets showed resilience amid this week’s global selloff, experts caution against excessive optimism. Trump’s tariffs and potential retaliation from China and the EU risk disrupting global trade flows, triggering economic slowdowns, and exacerbating inflation pressures. As one economist noted: “This is bad for everybody.” 

Latin American countries look to Asia to diversify trade partnerships

Chile’s President Gabriel Boric and Brazilian President Luiz Inácio Lula da Silva are spearheading a regional strategic pivot toward Asia amid escalating US trade tensions. During a six-day tour of India, Boric announced negotiations for a “comprehensive economic partnership agreement” with the country’s Prime Minister Narendra Modi, highlighting a 1,000% increase in Chilean food exports to India over the past decade.

Lula, meanwhile, secured a meat export deal with Vietnam and set an ambitious $15 billion bilateral trade target for 2030.

These high-profile diplomatic initiatives reflect a coordinated regional strategy to reduce economic dependence on traditional partners, particularly the US. Both leaders have explicitly criticized American protectionism in recent forums, with Boric calling diversification “vital in the face of unilateral decisions such as the tariffs announced by the US.” 

Bolivian energy diversification efforts yield first fruit 

Argentina has launched its first-ever gas exports from the prolific Vaca Muerta shale formation to Brazil via Bolivian pipelines, Reuters reports. The move creates a strategic energy corridor that benefits all three nations.

The milestone operation, involving TotalEnergies, Bolivia’s state-run YPFB and Brazil’s Matrix Energia, delivered approximately 500,000 cubic meters through Bolivian infrastructure after more than a year of complex negotiations.

For Bolivia, whose own gas production has been declining, the deal represents a new revenue stream through transit fees after initial reluctance to act merely as a passthrough.

What We’re Reading

Nigeria’s net FX reserves surge to highest level in three years (Premium Times)

Nigeria’s president replaces entire board of state-owned oil company (FT)

Kenya’s withdrawal from its IMF funding program won’t immediately derail commercial opportunities for firms (FrontierView)

Uganda electricity tariffs reduced by 14% (Business Insider)

UAE firm buys into Uganda refinery (Reuters)

Mozambique’s dollar bonds slump after Moody’s warning on debt (Bloomberg)

UAE state oil company acquires stake in Mozambique gas (Semafor)

South Africa’s coalition in peril after ANC passes budget without partner (FT)

White House moves Middle East advisor to Africa role (Business Insider)

ASEAN advised to deepen regional trade after Trump tariffs (Nikkei)

Iran proposes indirect talks with US mediated by Oman (Axios)

Trump lines up visit to Saudi Arabia and other Gulf states (Axios)

First Quantum drops $20bn arbitration demands over Panama copper mine (FT)

US deports more alleged gang members to El Salvador amid court fight (Reuters)

Costa Rica says it will engage US after Trump imposes tariffs (Reuters)

Peru beats growth expectations in 2024 (FrontierView)

Peruvians ‘long for a Bukele-like strongman’ to beat crime (The Economist)

Chile aims to crank up ESG financing (Latin Finance)

Argentina IMF deal advances fail to clear FX haze (Reuters)

Argentina poverty falls as inflation comes under control (Bloomberg)

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