The US tariff policy could deal a blow to African exports, and experts warned that a prolonged US-China trade war would devastate the continent if China’s economy were to stumble.
The United States runs its largest trade deficits with Africa’s top commodity exporters – South Africa, Nigeria, Algeria and Angola – as it is heavily reliant on their precious metals, oil and platinum, according to Renaissance Capital Africa. But it said US-Africa trade remained small – last year the continent accounted for US$39 billion of American imports, or just over a month’s worth of US trade with Mexico or Canada. South Africa and Nigeria account for over half of those imports.
Meanwhile, Lesotho, Madagascar, Botswana, Angola and South Africa have been hardest hit in sub-Saharan Africa by Donald Trump’s “reciprocal” tariffs that range from 10 per cent to 50 per cent.
In an abrupt retreat, Trump announced early on Thursday he would pause the “reciprocal tariffs” for 90 days for most countries, but hit China harder with additional tariffs to a cumulative rate of 145 per cent this year as the trade war continued to escalate.
Kai Xue, a Beijing-based corporate lawyer who advises on foreign direct investment and cross-border financing, said resource-rich South Africa and a few countries that have developed clothing manufacturing industries under the US African Growth and Opportunity Act (AGOA) – such as Kenya, Ethiopia, Mauritius and Lesotho – could be seriously affected.
“South Africa, with a diverse set of exports amounting to around US$8 billion annually to the US, is likely to be hammered if the tariffs are not rescinded,” Xue said.
