Southern Africa will mostly bear the brunt of America's new trade policy

On April 2, 2025, US President Donald Trump during his 'Liberation Day' Speech announced the intention to impose reciprocal tariffs targeting key global trade partners. The tariffs, framed as a measure to protect American manufacturing and reduce the trade deficit, followed his earlier protectionist policies during his first term.

However, amid mounting domestic pressure from businesses and international backlash, the implementation of these tariffs was temporarily suspended, pending further negotiations and assessments of the economic impact. On April 9, Trump announced that the reciprocal tariffs above 10%, which had gone into effect that morning, would be paused for 90 days for all countries except China.

Most of the tariffs announced by Trump never fully materialized - not unlike most of his political moves. They were more bluster than action. Still, the real shift lies not in the tariffs themselves, but in what they signal: a renewed focus on America's trade balance. This change in priorities poses a deeper challenge for global trade with a greater emphasis on increasing the presence of American-made goods both at home and abroad.

Whether this is achieved through actual tariffs, tough negotiations, or by carving out new niches for US companies is less important than the fact that the foundations of the US are fundamentally changing. Regardless of whether tariffs above 10% ever actually come to pass or whether they simply serve as a negotiating tactic, the list reveals the priorities of the new administration toward its trading partners and redefines the role of the US in their economies.

Africa has emerged as one of the primary victims of this new policy. However, it's fair to say that most African countries have been affected indirectly; they found themselves caught in the Trump administration's struggle to level out the balance of trade with the EU and China, and became victims of sector-specific initiatives (such as those related to the automotive and textile industries) driven by internal discussions in the US.

While the US remains a key trading partner for many African nations, Africa itself accounts for just over 1% of total US trade, and its contribution to America's trade deficit ($1 trillion annually) is less than 1%. Each year, the US trade deficit with African countries amounts to about $10 billion, with just four nations accounting for the bulk of it: South Africa ($7 billion), Nigeria, Algeria, and Libya (over $1 billion annually, each).

The tariff rates themselves still matter, as their planned implementation was only postponed for three months to allow time for negotiations and consultations with key trade partners. This means that the entire negotiation process will unfold under the looming threat of tariffs - a classic "sword of Damocles" tactic. Even if the duties are not immediately enforced, their mere presence in the background gives the US significant leverage in shaping trade terms more favorable to American interests.

On Trump's list, 20 African countries are facing increased tariffs: Lesotho (50%), Madagascar (47%), Mauritius (40%), Botswana (37%), Angola (32%), Libya (31%), Algeria (30%), South Africa (30%), Tunisia (28%), Namibia (21%), Zimbabwe (18%), Zambia (17%), Malawi (17%), Mozambique (16%), Nigeria (14%), Chad (13%), Equatorial Guinea (13%), Cameroon (11%), the Democratic Republic of Congo (11%), and Ivory Coast (Cote d'Ivoire) (11%).

The most significant impact will be felt by South Africa, which accounts for 70% of the overall US trade deficit with Africa. In addition to the base tariff of 30%, 25% applies to imported vehicles. South Africa is home to VW, Toyota, BMW, Mercedes, Ford, and Hyundai factories, and its auto exports to the US total $2-3 billion per year. Other major categories of South African exports include platinum group metals, ore, and fruit. However, as a large, diversified economy, South Africa can afford to lose some of its exports to the US even if it incurs losses, and redirect part of that trade toward other African and Asian markets.

Smaller countries such as Lesotho - which has been hit with a staggering 50% tariff - will find it more challenging to cope. Lesotho's textile industry, developed primarily for the American market (exports amount to about $200 million annually) is under serious threat. Madagascar, which exports around $300 million in textiles to the US, is also strongly affected by these tariffs.

The geographical distribution of African "worst offenders" reveals that countries in Southern Africa - i.e., South Africa, Madagascar, Botswana, Mozambique, Lesotho, Zambia, Zimbabwe, and Mauritius - will bear the brunt of these tariffs. In the short term, this will likely lead to a worsening socio-economic situation in the Southern African Development Community (SADC), as shifts in export flows and economic restructuring will put additional strain on South Africa.

Despite the seemingly erratic nature of the Trump administration's actions, the pressure on South Africa appears to be a consistent US strategy.

When analyzing the African nations hit by increased tariffs, we should note those countries that, although mentioned in Trump's 'Liberation Day' announcements, received a base tariff rate of just 10%: Egypt, Morocco, Kenya, Ghana, Ethiopia, Tanzania, Senegal, and Uganda. Among these, Egypt, Morocco, and Kenya stand out as key US partners, while Ghana, Senegal, and Tanzania represent rapidly growing economies. It seems that for now, the US wants to avoid souring relations with these nations.

If these tariffs are implemented as announced or even if only the 10% base rates remain, it would still spell disaster for the African Growth and Opportunity Act (AGOA). This act provided duty-free access to the US market for certain categories of exports, including energy resources, textiles and apparel, agricultural goods, precious metals, automotive components, and pharmaceuticals. From an economic standpoint, the US has found AGOA less necessary since the mid-2010s, especially after reducing its dependence on African oil and gas imports - in 2008, $61 billion of the $66 billion in imports from AGOA countries were energy products. AGOA will expire in September 2025, and negotiations to renew it haven't gone well, even under former US President Joe Biden. Meanwhile, Trump's recent actions make it nearly impossible to preserve the AGOA in its current form.

For those who are unhappy with the tariffs, Trump suggests localizing production in the US. While this requirement makes sense for the EU, China, and even South Africa - countries that export finished goods - it's unclear how raw material exporters, who make up the majority in Africa, can adapt to this demand.

In practice, the new tariff preference system is likely to take into account a range of factors: political stance and ideology, willingness to negotiate, and the provision of both formal and informal preferences to American exporters and investors.

This approach is already yielding results; for instance, Zimbabwe's President Emmerson Mnangagwa recently announced his intention to grant duty-free access to American goods. However, this new system will be less transparent and beneficial for African suppliers, and it will be even more politically driven than AGOA.

Trump's tariff policies and the decline of the AGOA era clearly demonstrate Washington's evolving approach to global trade. In the late 19th century, America's primary interest in its relations with African nations was rooted in free trade-specifically, duty-free access to African markets. This was the goal pursued by the US delegation at the Berlin Conference in 1884, which established the colonial division of Africa.

The principle of free trade (including in colonies) also underpinned the Atlantic Charter of 1941, which was a significant step toward dismantling colonial systems. While certain raw materials (like rubber or uranium from the Democratic Republic of the Congo, which powered the Manhattan Project) were important for the US, the primary focus in trade with Africa at that time was the export of goods.

However, globalization changed that dynamic, as both worldwide and in its dealings with Africa, the US shifted from being a seller to a buyer. This shift gave birth to AGOA, which provided America with oil and gas.

Since the 2010s, the US appears to be returning to a "seller" model, as evidenced by initiatives aimed at boosting American exports to Africa, such as Obama's "Power Africa" and Trump's "Prosper Africa" initiatives. Against this backdrop, Trump's decisions regarding global trade and Africa seem like a logical continuation of a long-standing strategy to restructure the trade balance, regardless of which administration is in power in Washington.

For African countries, the consequences of Trump's tariff policy are multifaceted. Firstly, these measures provide an opportunity for African nations to focus on regional markets and develop industries tailored to their national economic needs.

Secondly, the issue of trade deficits remains just as pressing for African countries as for the US. The annual negative balance ranges between $70-$100 billion, and trade deficits continue to be a key factor driving up debt levels and currency shortages. In this context, it's unlikely that African nations will be able to increase their purchasing power without greater credit access from interested sellers, and current trends do not suggest this will happen.

Finally, it's now unlikely that Africa will succeed Southeast Asia as the 'world's workshop', particularly through offshoring US-oriented manufacturing capabilities. While relocating some production from China to Africa remains a possible scenario, it will likely be limited in scope. Thus, Africa's industrialization will primarily depend on internal demand.