President Donald Trump has imposed a global tariff rate of 10% after the US Supreme Court struck down his previous trade policy, with an analyst saying “the complexity and volatility of the stop-start tariff regime from the United States is clearing putting pressure on African economies.”<\/p>\n
In April last year, Trump announced his “Liberation Day” measures which imposed sweeping tariffs on countries around the world. The African country of Lesotho was the worst hit, with a 50% tariff imposed, with Madagascar facing a 48% levy. The specific tariffs on individual countries in Africa and globally have fluctuated since then.<\/p>\n
However, in a ruling announced last week, the US Supreme Court said that the president had overreached in implementing the tariffs under the International Emergency Economic Powers Act (IEEPA).<\/p>\n
Trump reacted furiously, saying he was “ashamed of certain members of the court […] for not having the courage to do what’s right for our country.” He then imposed a global base rate tariff of 10% under powers he claims are given to him under the Trade Act of 1974, although the president had said it would be 15%. The tariffs will be in force for an initial period of 150 days.<\/p>\n
For countries such as South Africa, which previously faced a 30% levy, the move represents an easing of the protectionist measures which had stunted exports to the US. Under the new regime, most countries are either unaffected or face a lower tariff rate.<\/p>\n
However, it is currently unclear how these new tariffs will affect the African Growth and Opportunity Act (AGOA), an initiative which allows 32 countries in Sub-Saharan Africa duty-free access to the US market and which was recently extended for a year.<\/p>\n
‘Uncertainties don’t bode well’<\/p>\n
As the Center for Global Development (CGD) has noted, “what tariffs will replace AGOA? How can investors (in both the US and African countries) make credible trade and investment plans when the post-AGOA regime remains entirely unclear?”<\/p>\n
“These uncertainties don’t bode well for Africa’s economic prospects.”<\/p>\n
Daniel Silke, a political economy analyst based in Cape Town, tells African Business that “the complexity and volatility created by the stop-start tariff regime from the United States is clearing putting pressure on African economies exporting to the US market.”<\/p>\n
“There is some relief under AGOA, but we are still working our way through the blanket tariffs and how AGOA will be affected.”<\/p>\n
Tariffs force trade rethink<\/p>\n
In the mid- to long-term, however, Silke believes that the global economic uncertainty unleashed by Trump’s tariffs will force African economies to develop stronger trading ties with each other, in order to make themselves collectively more resistant to protectionism from the US and elsewhere.<\/p>\n
“The broader global environment and the uncertainty caused by the United States’ position gives an opportunity to Africa and the Global South to improve their connections and trading regimes, such as by expediting the African Continental Free Trade Area,” Silke tells African Business.<\/p>\n
“Because of all the uncertainty in the global geopolitical space, it really is time for Africa to liberalise its trading space, especially when it comes to trading with fellow African nations but also with major markets in the rest of the world.”<\/p>\n","protected":false},"excerpt":{"rendered":"
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