Africa Flying

Africa Braces for Economic Hit As Trump's Tariffs End U.S. Trade Perks

Africa Braces for Economic Hit As Trump’s Tariffs End U.S. Trade Perks


The stiff new tariffs announced by President Donald Trump are shaking up trade ties between the United States and several African nations – many of whom have had preferential agreements with Washington for decades.

Unveiled at the White House on Thursday and dubbed “Liberation Day” by Trump, the plan imposes a minimum 10 percent tariff on all imported goods. It comes into effect on 5 April.

Countries with the largest trade deficits with the US will be hit with additional, reciprocal tariffs starting 9 April.

“Reciprocal. That means they do it to us and we do it to them. Very simple. Can’t get any simpler than that,” Trump said.

‘Back to drawing board’

The new measures have drawn concern across the African continent. South Africa called the tariffs “unilaterally imposed and punitive” and warned they would act as a “barrier to trade and shared prosperity”.

South Africa is the United States’ second largest trading partner in Africa after China. In 2024, it exported $14.7 billion worth of goods to the US. The automobile, agriculture and pharmaceutical sectors are expected to be hit hardest.

The South African presidency said there was now an urgent need “to negotiate a new bilateral and mutually beneficial trade agreement with the US”.

Oscar van Heerden, senior research fellow at the Centre for African Diplomacy and Leadership at the University of Johannesburg, told RFI the new rules would have wide-ranging effects.

“The impact of this new tariff regime is going to be very bad. Everyone is now going back to the drawing board to understand what precisely is the financial implications,” he said.

To display this content from X (Twitter), you must enable advertisement tracking and audience measurement.

Accept Manage my choices Van Heerden said Trump’s tactic was to deliberately disrupt. He described the tariff decision as part of a broader strategy to provoke strong reactions and force countries into negotiations.

“And once you are at the negotiating table that’s when the Trump administration will say what it truly wants. If you want a favourable trade agreement with the US, you will have to compromise on things that are not necessarily trade related,” he said.

“In the case of South Africa, possibly the case that we brought to the international court of justice against Israel for genocide.”

Small economies

Among the countries hardest hit by the tariffs is Lesotho, which now faces a 50 percent levy on its exports to the US.

“In a way, it is retaliation from the United States as we charge 99 percent on the goods they export to us,” said Leseko Makhetha, head of the economics department at the National University of Lesotho.

In 2024, Lesotho exported $237.3 million worth of goods to the US. It imported just $2.8 million. The US is Lesotho’s second largest trading partner after South Africa.

“We export mainly textile products to the US. A sector that accounts for 40 percent of local employment. The new 50 percent tariff will make it very difficult for us to be competitive, which means that 40,000 jobs are at risk,” Makhetha explained.

He warned the economic fallout could be severe. “Unemployment, rising prices and political riots may plague the small southern African kingdom.”

Lesotho’s currency, the loti, is pegged to South Africa’s rand. A recent drop in the rand’s value has made imports even more expensive for Lesotho.

Other countries facing steep tariffs include Madagascar (47 percent), Mauritius (40 percent), Botswana (37 percent), Angola (32 percent), Libya (31 percent), Algeria (30 percent), Tunisia (28 percent), Côte d’Ivoire (21 percent) and Nigeria (14 percent).

Response uncertain

Makhetha said it was too early to offer a quick fix but suggested Lesotho could try to boost exports of mineral commodities to the European Union and Asia.

“Trump’s policies which are adversely affecting African nations may give a well-needed boost to the African Continental Free Trade Area,” he said.

Van Heerden urged African countries to negotiate with the US as a bloc through regional organisations like SADC, Comesa and Ecowas.

“The smaller economies should engage with the United States as a group. That’s the only way they will be able to negotiate with the United States. If the small economies engage individually, the US will walk all over them,” he said.

The new tariffs are also likely to override the African Growth and Opportunity Act (AGOA), which provides duty-free access to the US market for eligible sub-Saharan African countries. AGOA is set to expire in September.

“We expect South Africa to be excluded from the AGOA agreement,” said van Heerden. “There has been a big move to that effect by both parties in Congress.”

He added that the tariffs signalled a push by the Trump administration to renegotiate all existing agreements in America’s favour.

Africa Braces for Economic Hit As Trump's Tariffs End U.S. Trade Perks   Africa Flying
  • Facebook
  • Twitter
  • Pinterest



Source link

Leave a Comment

Your email address will not be published. Required fields are marked *

Pin It on Pinterest

Verified by MonsterInsights