Here are some changes we can expect to see with a prolonged global tariff by the Trump administration in the USA.
1. Trade Diversion & Supply Chain Shifts Benefiting Africa
China+1 Strategy: Due to U.S.-China trade tensions, multinationals are diversifying supply chains, with some moving production to Africa (e.g., Vietnam, Ethiopia, Kenya for textiles; DR Congo, Zambia for critical minerals).
AGOA Utilization Rising: African exports to the U.S. under AGOA (duty-free) grew in sectors like apparel (Lesotho, Kenya), autos (South Africa), and agriculture (Senegal, Ghana) as firms avoid China tariffs.
China+1 Strategy: Due to U.S.-China trade tensions, multinationals are diversifying supply chains, with some moving production to Africa (e.g., Vietnam, Ethiopia, Kenya for textiles; DR Congo, Zambia for critical minerals).
AGOA Utilization Rising: African exports to the U.S. under AGOA (duty-free) grew in sectors like apparel (Lesotho, Kenya), autos (South Africa), and agriculture (Senegal, Ghana) as firms avoid China tariffs.
2. African Minerals & Green Energy Boom
Battery Metals (Cobalt, Graphite, Lithium): U.S. tariffs on Chinese EVs and batteries could boost African mining, as the U.S. seeks non-Chinese critical mineral suppliers (e.g., Congo, Zimbabwe, Namibia).
But Risk of Overreliance: If African minerals are processed in China, they may still face U.S. scrutiny under tariff loophole rules.
Battery Metals (Cobalt, Graphite, Lithium): U.S. tariffs on Chinese EVs and batteries could boost African mining, as the U.S. seeks non-Chinese critical mineral suppliers (e.g., Congo, Zimbabwe, Namibia).
But Risk of Overreliance: If African minerals are processed in China, they may still face U.S. scrutiny under tariff loophole rules.
3. Negative Spillovers from Global Trade Wars
Commodity Price Volatility: Steel/aluminum tariffs disrupt global markets, affecting African exporters (e.g., South African metals).
Strong Dollar Hurts Debt: Trump’s protectionism could strengthen the USD, making African dollar-denominated debt harder to repay.
Commodity Price Volatility: Steel/aluminum tariffs disrupt global markets, affecting African exporters (e.g., South African metals).
Strong Dollar Hurts Debt: Trump’s protectionism could strengthen the USD, making African dollar-denominated debt harder to repay.
Key African Countries Most Exposed
| Country | Exposure to Trump Tariffs | Potential Impact |
|---|---|---|
| South Africa | Steel/aluminum exports to U.S. | Could face higher tariffs if global quotas tighten |
| DR Congo | Critical minerals (cobalt, copper) | High demand from U.S., but Chinese processing may trigger scrutiny |
| Ethiopia, Kenya | Apparel under AGOA | Risk if rules tighten on Chinese fabric inputs |
| Nigeria | Oil exports (indirect via global prices) | Lower demand could hurt if tariffs slow global growth |
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