The tariff shockwave: What does Trump’s trade policy mean for Africa?

For years, the African Growth and Opportunity Act (AGOA) has offered a free pass for over 1,800 products from sub-Saharan Africa into the American marketplace, with thousands more tagging along under the Generalised System of Preferences. This setup, averaging nearly $38 billion in annual US imports from AGOA countries, was ostensibly about fuelling African growth. US President Donald Trump’s “Liberation Day” tariffs, announced yesterday, are about to redefine the rules of the game.

A double dose

President Trump, citing a national emergency over foreign trade, has kicked off a new era of protectionism with a 10% baseline tariff on goods from every corner of the globe, starting this weekend. For Africa, this effectively cancels out the duty-free access enjoyed by some under AGOA. 

The US administration has also rolled out personalised reciprocal tariffs – coming into effect next week – targeting nations with the biggest trade imbalances with the US. Across Africa, these reciprocal tariffs paint a varied picture, from Lesotho’s hefty 50% to Kenya’s more modest 10%. This suggests the US administration isn’t just crunching trade numbers; factors such as “internal issues” in South Africa – where Elon Musk was born – appear to have played a role in its 30% tariff. 

While the specifics for each African nation are still somewhat hazy, the usual suspects in US-Africa trade – apparel, agriculture, minerals, and vehicles – will likely feel the pinch. Crucially, some sectors already facing US tariffs – steel, aluminum, and cars, along with copper, pharmaceuticals, semiconductors, and lumber – could be dodging this new tariff. A strategy to beef up US manufacturing is clearly emerging.

“Preferential” treatment

African nations that are deeply intertwined with US trade are bracing. Southern Africa looks particularly vulnerable, with a number of countries in the SADC region facing the highest reciprocal tariffs, as illustrated below.

Tariffs directly erode the price advantage of African exports in the US market. This increased cost is likely to shrink export volumes for African nations, especially for goods with easy-to-find alternatives in the US. For example, the apparel industries in Lesotho and Madagascar – which flourished under AGOA’s duty-free umbrella – now face hefty tariffs. South Africa’s auto sector, a major AGOA success story, now faces a combined tariff of 55% (30% reciprocal plus the existing 25% on foreign-made vehicles), potentially crippling its US market presence.

Geopolitics on steroids

Tariffs on other major US trading partners like China, the EU, Mexico, and Canada could spark a major reshuffling of global supply chains as businesses scramble to dodge the higher costs of trading with the US. If US tariffs on Chinese goods are steep, European or other Asian buyers might look to African producers as alternatives. But African countries would need to flex the (currently lacking) production muscle and infrastructure to seize the opportunity. 

Trump’s tariffs are a lose-lose scenario globally, drag down the economy, and potentially hitting demand and prices for the commodities many African nations rely on, like oil and minerals. Conversely, US tariffs on manufactured goods that Africa imports could lead to higher prices for these essential products. The increased uncertainty around global trade could also scare away an already mercurial FDI, as investors might seek safety amid turbulence. 

This may push African nations to cozy up (even further!) to other global powers like China or the EU, which can offer more stable or favourable trade deals. Given China’s already significant economic footprint in Africa, with trade between the two reaching $295 billion in 2024, the US tariffs could catalyse further realignment of political and economic alliances on the continent.