Afreximbank Research has said that U.S. President Donald Trump’s announced reciprocal tariffs may have a limited direct impact on African economies, given the continent’s deepening trade ties with China.
However, it noted that the indirect effects of ongoing U.S.-China trade tensions could pose significant risks to Africa’s commodity-dependent nations.
In an impact analysis of Trump’s tariffs published on Friday, Afreximbank Research highlighted that recent trade data reveal a major shift in Africa’s global economic alliances, with China surpassing the United States as the continent’s leading trading partner.
“Over the past two decades, African nations have increasingly relied on China for both exports and imports, reducing their direct exposure to U.S. trade policies.
“This growing trade between China and Africa implies that recent U.S. reciprocal tariffs may have less direct impact on Africa,” it said.
The bigger threat: Indirect fallout from U.S.-China tensions
According to Afreximbank, the more pressing concern for Africa lies in the potential spillover effects of a prolonged U.S.-China trade war.
- It warned that if these tensions contribute to a sustained slowdown in China’s economy, African commodity exporters could face severe challenges.
- The bank pointed out that China remains the primary buyer of Africa’s key exports, including crude oil (Nigeria, Angola), copper (Zambia), cobalt (DRC), and agricultural products.
- A decline in Chinese demand could lead to lower export revenues, worsening trade balances, and increasing foreign exchange pressures for these nations.
“Additionally, a weaker Chinese economy may force Beijing to scale back its overseas investments, including projects under the Belt and Road Initiative (BRI).
“Many African countries depend on Chinese financing for critical infrastructure, and a reduction in funding could stall major projects, exacerbating fiscal strains in already debt-burdened economies,” it said.
AfCFTA and diversification
Afreximbank Research emphasized the urgent need for African nations to reduce their reliance on single trading partners and commodity exports.
According to the organization, the African Continental Free Trade Area (AfCFTA) presents a crucial opportunity to strengthen intra-African trade, diversify export portfolios, and build regional value chains.
“Africa’s increasing asymmetry in trade and investment relationships leaves it vulnerable to external shocks.
“To mitigate these risks, the continent must accelerate economic diversification and deepen regional integration under AfCFTA,” it added.
What you should know
Several African countries including Nigeria are at the receiving end of the Trump’s sweeping tariff policies that impose a baseline 10% tariff on all U.S. imports, alongside sharper, country-specific reciprocal tariffs aimed at nations that impose steeper duties on American goods.
- In the new policies announced on Wednesday, Exports from Nigeria to the US will attract a 14% tariff compared to the 27% that the US government claims it receives from Nigeria.
- The Trump administration’s reciprocal tariff policy is also set to impact several African nations, with countries like Nigeria, Ghana, Ethiopia, and Mauritius featured on the latest White House list of tariff adjustments.
- While Nigeria is not among the highest tariff imposers, the adjustment signals that the U.S. is casting a wide net that includes not just economic rivals but also developing nations with whom it previously maintained preferential trade terms.
