Trump tariffs won’t do much harm to Armenian economy, says expert

The United States’ new tariffs won’t cause any serious economic damage to Armenia because the volume of the country’s exports is low, according to economist Aghasi Tavadyan.

U.S. President Donald Trump last week announced a new baseline 10% tariff on goods from over 100 trading partners and reciprocal tariffs on those that his administration says have high barriers to U.S. imports. Rates are even higher for 60 countries or trading blocs that have a high trade deficit with the US. 

Armenia is among the baseline 10% countries.

Tavadyan told Armenpress the measure could actually strengthen Armenia’s economic ties with its fellow Eurasian Economic Union (EEU) members given the duty-free trade.

The volume of Armenian goods exported to the US doesn’t have a big share in Armenia’s external trade balance. It was about 50 million dollars before 2020. In the next two years it increased up to 80 million dollars, but in 2023-2024 it dropped nearly twice and amounted to nearly 40 million dollars, Tavadyan said.

20% of Armenian exports to the US is gold and diamonds, while 15% is alcoholic and non-alcoholic beverages. Canned vegetables and dairy products amount to a little volume of exports.

Aside from the low volume, there is not much variety in the exported products, thus the goods can be easily substituted in the US market, the economist said.

Just about 2% of Armenia’s net exports is directed to the US, he added.

The tariffs will be a “big blow” to the EU economy because it has great dependence on the US economy, the expert said, adding that it will also have a big political impact.

The Trump administration, unlike the previous US administrations, pursues a multipolar territorial policy, Tavadyan said. “Now the US is more interested in the regions and countries in its direct neighborhood, such as Greenland, Panama, Canada, more than other countries, and even the EU. This will lead to changes in the global economy. For example, the role of the WTO, which was managing tariff-free trade in the world, will be reduced,” he said.

According to Tavadyan, globalist trends will be reduced and nationalistic trends will emerge. “This is a signal that the world is no longer unipolar, but multipolar,” the economist said.

Aghasi Tavadyan said there won’t be big impact on the Armenian economy, instead this will be a certain signal for Armenian businesses to be forced to further deepen economic relations with EEU member states, with whom as a member of the union Armenia has duty-free trade. In the past five years Armenian exports to EEU countries grew five times, while exports to the EU dropped by 10%.

He said Armenia ought to expand its trade ties with other countries as well.