Trump’s tariffs: Africa should circumvent trade dependency through diversification

By: Favour Adeboye

The United States and China, previously adopters of free trade, are currently championing a protectionist agenda, experts say will adversely affect Africa, a region that is making efforts to keep its borders open for trade, albeit begrudgingly.

Although the World Trade Organisation (WTO) warns that the tariff war between the two trade giants will shrink global trade, Ken Ife, an economic expert, predicts Africa would suffer even more trade decline because of its heavy reliance on exportation. However, the continent can mitigate these effects if it remains resolute in intra-African trade, totally neglecting the global drift to protectionism.

On April 2, 2025, U.S. President Donald Trump imposed tariffs on several countries for goods imported into the country, citing trade imbalances and proclaiming liberation for domestic companies.

African countries that previously enjoyed free access benefits under the Africa Growth and Opportunity Act (AGOA) will now pay between 10 per cent and 50 per cent levy on goods, Lesotho bearing the highest, second only to China’s 245 per cent. While others got varying rates from 14 to 50 per cent, Kenya, Tanzania, and Algeria, among others, bear the baseline of 10 per cent tariffs, “because the U.S. do not run in trade deficits with them,” President Trump claims.

Trump’s tariff policy largely shuts out China, the world’s biggest trade hub, and in what it claims to be retaliatory measures, China imposed a reciprocal 125 per cent duty on U.S. imports into its country. The sudden hike in import tariffs from the world’s two trade giants may inherently reduce purchases of key resources from Africa, a long-time supplier of commodity goods to China and the U.S. 

Circumventing Trade Dependency Through Diversification

Several African countries like Nigeria, South Africa, Algeria, and even Lesotho depend heavily on specific commodity exportation. For instance, textile exports make up at least 33 per cent of Lesotho’s Gross Domestic Product (GDP), while oil exports significantly influence Nigeria and Sierra Leone’s GDP and foreign exchange earnings.

With the fallout of trade between the U.S. and China, African exporters fear a sharp decline in demand for key resources, which might lead export-dependent countries like Nigeria and Lesotho to economic recession. Not only that, African countries that used to enjoy free access under the AGOA will now either succumb to the U.S.’s new tariff policy to maintain trade ties or face fallout from the global trade scene due to unfavourable policies.

Either way, Africa would suffer losses: put up with low profit margins and grapple with job losses, which will directly or indirectly affect local economies. But the continent might see a positive tilt if it looks inwardly to a more sustainable solution: internally diversifying its trade.

In inspiring moves, countries like Lesotho and South Africa are pivoting to intra-African trade for leverage following Trump’s tariff. However, they may experience trade constraints from state parties.

The AfCFTA boasts the largest free trade agreement in the world by number of participating countries after the World Trade Organization, uniting more than 50 countries and creating a single market that aims to eliminate tariffs on 90 per cent of goods and reduce non-tariff barriers. Nonetheless, its influence on inter-border exchanges depends on state parties implementing its mechanisms and collaborating with the private sector to eliminate transportation challenges.

Utilising Public-Private Partnerships to Alleviate Infrastructure Deficits

Although Trump’s tariffs present an opportunity for regional advancements, African governments must set the pace for economic growth by addressing transportation infrastructure, a major problem plaguing most African states. If trade would drive regional growth in Africa, then the transportation hurdle needs to be dealt with.

A series of roadblocks affect Africa’s transportation system, including inadequate investment, limited roads, rail and air networks and inefficient systems resulting from outdated machinery. 

According to a 2024 UN trade and development report on Africa, infrastructure gaps in major sectors like transportation and energy drive up trade costs by 50 per cent above the global average, resulting in low competition.

Earlier in 2023, experts at the special session of the Africa Investment Forum had pointed out that just 53 per cent of roads on the continent are paved, isolating people from access to basic services, trade hubs and economic opportunities which in turn limits regional trade.

To facilitate inter-state exchange, Africa must tackle its transportation deficits. State governments should subscribe to investing in specialised machinery to aid movements, capitalising on policies guiding public-private partnerships.

In Nigeria, the Infrastructure Concession Regulatory Commission (ICRC) allows the private sector to participate in the financing, construction, operation and maintenance of public infrastructure projects.

Acts like this can be capitalised on to develop the transportation sector, enabling easier transportation of goods.

The U.S.-China trade war is a wake-up call for Africa to regionally strengthen its trade capacity. Rather than adjust to international protectionist mechanisms, African governments should prioritise initiating actionable strategies for regional trade integration, putting infrastructural development at the forefront.

Favour Adeboye is a development journalist and a Free Trade fellow at Ominira Initiative.

ALSO READ TOP STORIES FROM NIGERIAN TRIBUNE