Some of these tariffs are amongst the highest in the world. For instance, at 50 percent, Lesotho received the highest single tariff of all U.S. trade partners, on par with China and the European Union and higher than Vietnam (49 percent), Taiwan (48 percent) and Japan (47 percent), all of which have larger trade deficits with the United States than Lesotho. But not only that, compared to other countries, the impact on African countries will almost certainly be relatively more severe for two key reasons.
Impact on Africa
First, until this year, U.S.-Africa trade has, to a good degree, been shaped by the African Growth and Opportunity Act (AGOA), which, since 2000, granted preferential access at zero tariffs for thousands of products to the U.S. market for African countries, reflecting their relatively lower development levels.
The new tariffs therefore do not just signal a likely “demand-side” shock reduction of Africa exports to the United States—for instance driving up the price of Nigerian or Angolan oil to the United States, they also signal a huge blow to AGOA, an exceptional trade policy many non-African countries had accepted at the World Trade Organization (WTO) back in 2000 at the specific request of the United States. Unlike the earlier tariffs imposed on Canada and Mexico, where goods eligible for the United States—Mexico—Canada Agreement (USMCA) were exempted, the April 2 announcement did not indicate whether there would be an exemption of AGOA-eligible products from these new tariffs. While the positive impact of AGOA on African development is still debatable—for instance, despite AGOA, the United States moved from being Africa’s third-largest trade partner in the early 2000s to being eclipsed by China and India, while Africa’s share of total U.S. imports declined from 2.00 percent to 0.97 percent. Africa’s total exports to the United States have nevertheless increased by 43 percent over the past two decades, from $28 billion in 2000 to $40 billion in 2024. That said, exports to the United States from the continent have remained primarily raw and extractive. Over 51 percent of African exports in 2023 were mineral fuels and precious stones, not exactly products that compete with U.S. industrial prowess. Nevertheless, the overall impact of this about-turn in trade policy with the United States could lead to production cuts and job losses in African countries.
The second reason African countries are likely to be relatively harder hit by Trump’s tariffs compared to other countries in the world is are indirect effects—stemming from the fact that most African countries are import-dependent on the rest of the world. Other countries and regions, such as the European Union and China, have already indicated plans to retaliate, and they and other large trade blocs are likely to seek to preserve free trade within their respective regions in response to the evolving global trade order. Such fragmentation will likely reduce global trade by reducing exports, and with it, global economic growth. Furthermore, tariffs will lead to inflationary pressures. As a tariff is essentially a tax on imports, the cost of intermediate and final goods will increase for consumers worldwide, even for countries that haven’t imposed any new tariffs. Depending on the demand elasticity of different goods, higher prices will dampen consumer demand and slow down global economic growth. The overall effect, in months to come, will likely be slowly rising costs of goods in African countries, as has been experienced in the wake of Covid-19.
As a result, the African continent must take these trade policy shifts incredibly seriously. Any knee-jerk, accommodative, or retaliatory reactions should be avoided. This is because Africa has some cards in crafting a response to this new development and should seek to play them strategically and carefully.
Africa’s Options
In particular, if there was ever a time for African countries to consolidate a U.S.-Africa strategy, now is the time. The role of the African Union (AU) will be critical to marshal a coordinated continental response. To this end, the Angolan President João Lourenço, as current chairperson of the African Union, along with the new AU Commission Chairperson Mahamoud Youssouf, should call an extraordinary meeting immediately to deliberate and agree on a joint course of action with the following considerations.
First, African countries must engage with their U.S. counterparts to make a stronger case for new trade preferences for Africa. Just like Canada and Mexico were exempt from the reciprocal tariffs due to the United States’ national interest, a similar case can be made for Africa in terms of market access and critical minerals supply chain security. The African Union and African leaders should seek to demonstrate that preferential trade with the continent, in fact, overall serves U.S. national interests, just like the USMCA.
This case can be made on the basis of two key arguments.
First, there is no doubt that the United States seeks to gain greater market access for U.S. firms and products abroad. This requires the existence of purchasing power amongst foreign consumers. By imposing tariffs on African exports to the United States, however, the United States makes it difficult for Africa to obtain the purchasing power necessary to demand U.S. products. Thus, just as the United States committed to rebuilding Europe and Japan after World War II, and facilitated the economic transformation of South Korea, Taiwan, and Hong Kong as part of a broader market-building strategy, the United States should support preferential access for African goods to the U.S. market as a market-building strategy. This is critical, especially considering that Africa has the youngest population and will be home to over 25 percent of the global population in the next few decades.
The second argument is that African countries have a strong endowment of critical minerals, the bulk of which remain under U.S. ownership, not Chinese ownership (as many are led to believe). This is a huge bargaining chip for the continent, relevant to at least 24 African countries that are greatly dependent on mining, with minerals taking up over 75 percent of total export earnings. For instance, between 2013 and 2017, minerals and metals made up 92 percent of Botswana’s total merchandise exports and 81 percent of the Democratic Republic of the Congo’s total merchandise exports. It should not be underestimated. As tariffs are set to hit U.S. firms in the automotive, aerospace, and chemical sectors, which are heavily dependent on critical minerals, the bulk of which Africa has, it is not in the U.S. interest to impose tariffs on African goods.
However, as a second action while engaging with the United States directly, African leaders must also seek to diversify export markets, urgently.
In particular, this is the moment to accelerate internal implementation of the African Continental Free Trade Area (AfCFTA), especially as the global trade order becomes fragmented into regional trade blocs. The experimental, interim Guided Trade Initiative needs to move into full operation, and no resources spared in doing so by the secretariat and African trade ministries. Domestic ratification processes must be accelerated, and African trade and investment organizations must coordinate quickly to prioritize hubs for attracting investment in manufacturing, technology, and infrastructure sectors. This will not only enhance intra-African trade but also reduce vulnerabilities to external markets while improving economic stability across Africa.
African leaders should also look beyond the continent.
In particular, BRICS countries (originally comprised Brazil, Russia, India, China, and South Africa) offer a huge opportunity for African diversification, especially in value-added sectors. As of 2022, BRICS accounted for approximately 23.0 percent of Africa’s total exports, with 65.0 percent of these going to China, 31.0 percent to India, 3.6 percent to Brazil, and 0.6 percent to Russia. These low export shares indicate an opportunity for more trade between African and BRICS countries. For instance, our firm has long argued that the African Union should push China to recognize the AfCFTA—so that countries such as South Africa—who will now face 30 percent higher costs for their textiles exports to the United States—can switch at least some of those sales to Chinese markets at a zero tariff, which least developed countries such as Tanzania or Congo can currently benefit from, but have significantly less developed industrial sectors.
Similarly, the African Union should push the European Union and smaller markets such as the United Kingdom to up their game in preferential agreements with the continent, including fully recognizing the AfCFTA. Yet, care must be taken to ensure that other countries do not switch to making Africa a dumping ground for excess goods created by the reduction in exports to the United States.
Third and finally, African countries need to consider carefully the pros and cons of a retaliation against U.S. tariffs or accommodative responses (such as zero tariffs for the United States).
With the new tariffs, the United States clearly seeks to disrupt global trade norms, when, of course, African countries have been arguing for shifts to such norms for decades already. Moreover, the African Union’s Agenda 2063 vision is of an Africa at the center of global supply chains, and therefore both manufacturing and trade. Thus, African countries must take an Africa-first approach in their response to the United States.
For instance, while a reciprocal strategy might be a sensitive move considering the size of most African economies relative to the United States, a joint package coordinated by the African Union or relevant Regional Economic Communities can bring pause to the U.S. side, considering the bargaining chips already set out above, as well as the growing concerns amongst U.S. business groups about the implications of tariffs on their operations. The package could even include options around differentiated responses by certain types or groups of African countries.
In addition, in the strategy, African countries should consider a reconfiguration of the WTO for countries other than the United States to align and synergize their trade agreements in a manner that encourages diversification of trade partners and supply chains. And the African Union should reach out to and coordinate with large manufacturers across the world in the four AfCFTA priority sectors, in particular, with a view to building new effective frameworks of economic partnership and cooperation.
This is a huge moment in global trade. And although Africa still accounts for under 4 percent of global trade, it is unfortunately an even a huger moment for the continent, with impacts potentially as long-lasting as the Covid-19 crisis. During the Covid-19 crisis, while some African countries had an initial impact to go it alone, it soon became very clear that to manage the contagion, as well as to avoid being at the back of the queue for everything from personal protective equipment to vaccines, the continent needed to work together. In other words, working together became our card. This is that same kind of moment. No African country should reach out to the United States or announce its trade policy until all of us play our cards together.
Hannah Ryder is a senior associate (non-resident) with the Africa Program at the Center for Strategic and International Studies in Washington, D.C., and CEO of Development Reimagined. Ovigwe Eguegu is a policy analyst at Development Reimagined focusing on geopolitics, diplomacy, and international institutions. Trevor Lwere is an economist at Development Reimagined.
