U.S. Tariff Increase highlights urgent need to boost intra-African trade

Friday 04 April 2025 - 10:50

By: Dakir Madiha

U.S. Tariff Increase highlights urgent need to boost intra-African trade

African economies find themselves at a critical crossroads, faced with the dual pressures of American protectionism and the pressing need for strategic economic realignment. The recent announcement from the U.S. government regarding tariffs reaching up to 50% on imports from 185 countries—51 of which are in Africa—has triggered significant concerns among nations on the continent.

The White House justifies these measures as necessary to shield American industries from what it perceives as unfair competition due to non-reciprocal tariffs. However, this protectionist strategy serves as a warning to global economies, compelling them to choose between retaliatory actions and adaptation.

An inevitable trade war with varied impacts

Countries such as Europe, Canada, and China are already formulating countermeasures, foreshadowing an escalation of trade tensions. While developed nations may have the resources to engage in trade wars, developing countries—particularly those in Africa—stand to suffer the most.

For instance, South Africa, Nigeria, Egypt, and Algeria rank among the top 50 exporters to the U.S., primarily dealing in commodities like minerals, precious metals, and oil. With the U.S. aiming to bolster its domestic production in these sectors, the new tariffs threaten to undermine the ambitions of African producers. Nigeria's Aliko Dangote’s mega refinery, which relies on the U.S. market for kerosene exports, may particularly feel the heat.

Beyond raw materials, Africa's nascent industries are at risk. Benin's Glo-Djigbé Industrial Zone, which began exporting clothing to the U.S. in 2023, has already seen its textile exports rise to 5.7% of its total exports to the country in 2024. Other nations, including Kenya and Egypt, which heavily depend on U.S. textile exports, alongside Morocco—known for its electrical machinery—are similarly vulnerable.

Strategic realignment of trade

In light of the pressures facing African trade, countries must consider two paths: either reduce their own tariffs to maintain preferential access to the U.S. market, thereby jeopardizing local industries, or pivot their exports towards other partnerships.

While Europe and Asia may appear to be natural alternatives, the most sustainable solution lies within Africa itself. Currently, intra-African trade constitutes less than 20% of the continent’s total exchanges, one of the lowest ratios globally. Although multiple regional initiatives have been launched to address this issue, results have not met expectations.

The African Continental Free Trade Area (AfCFTA) presents a unique opportunity for the continent to diminish its reliance on foreign markets and establish robust value chains domestically. However, the implementation of this initiative has been sluggish and requires acceleration.

The notion of temporary American protectionism should not serve as an excuse for inaction. With a population of 1.4 billion and abundant natural resources, Africa possesses the necessary tools to enhance its economic integration and better withstand global trade disruptions. The increase in U.S. tariffs is yet another signal underscoring the urgent need for action.