AFRICA FACES TRUMP'S TARIFFS
CDD 112 English
AFRICA FACES TRUMP'S TARIFFS
Quite logically, French and European commentators had their eyes focused, in the picture proudly brandished by Donald Trump in the White House office on April 2 in the name of "liberation", on the additional customs duties that were going to hit the European Union or on those concerning China or even some other major powers. in a shuffling of cards blurring all the principles of a World Trade Organization (WTO) of which we can just as logically wonder what will remain after such an earthquake.
But as is often the case, less attention was paid to the fact that Trump's table included a list of all the countries in the world, regardless of the size of their trade with the United States. We will have understood the symbolic gesture, the one that wants to finally signify the "liberation" of the United States from an international vice that has hindered the greatness of the country on all sides.
These countries include all developing countries, including African countries. Many, if not most, of them inherit an additional 10% tariff, which is generally the same as the one the country imposed on exports from the United States. A principle of reciprocity, one could say, following the example of Trump and his emulators, by publishing any principle of international solidarity. But for some, the bill is much heavier and even presents aspects that cannot be reduced to a question of reciprocal economic equilibrium.
A strange decision
At first glance, such a decision may be surprising. Viewed as a whole, African trade with the United States represents only a marginal share of the latter's international trade, nor can it be considered a substantial threat or loss to the United States. Conversely, Africa appears to the world as a potential supplier of many minerals, including the most strategic minerals from, for example, Katanga in the DRC. Trump's decision may therefore seem paradoxical. One might indeed think that increased free trade between the United States and Africa would open up a royal road for the latter towards strategic materials in exchange for textile imports of much more marginal importance, in a trade balance that is a priori more advantageous for the Américains.Il is therefore difficult to understand the "logic" that led Trump to a decision for which his administration has not provided a clear explanation. However, we can hazard a few hypotheses. The first is the simplest, that of countries that have protected themselves from American imports to fill the coffers of their states or for other more strategic or political reasons. This is the case, for example, of two oil and gas producing countries such as Algeria and Equatorial Guinea. The latter was supposed to impose a 25% tax on American imports, Trump responds with an almost moderate "reciprocal" tax of 13%. With Algeria, the rates are heavier, 58% for American imports, in return a 30% American tax. In the latter case, one cannot fail to read an obvious political position on both sides, Algiers being almost never aligned with Washington. For the DRC, Côte d'Ivoire, but also Cameroon and Chad, other important African countries, all four French-speaking, the mechanism is comparable. All four are considered by Trump to have erected barriers to the entry of American products, sometimes significant (22% for Cameroon and the DRC, 26% for Chad, 41% for Côte d'Ivoire). Jeune Afrique(see their article of April 3, 2025) presents these rates as "supposedly imposed" on American products, which suggests that the reality is probably different. And Trump's response is also heavy (a surcharge of about half the rate indicated above but for the export of their products to the United States), even if, in doing so, the American president can boast of not having gone all the way to the end of the "reciprocity" envisaged. Too generous in a way! The political dimension is probably not absent from the White House's calculation, which must see the DRC as under excessive Chinese influence, despite the efforts of its president Felix Tsishekedi to get closer to the United States. As for Côte d'Ivoire, Cameroon and even Chad, their proximity to France and the European Union cannot work in their favour. The same reasoning can also be applied to Madagascar, which is subject to one of the heaviest surcharges (47%) in an equally surprising way, unless we imagine that the United States starts to produce vanilla, the main product exported from the Big Island to the United States. English-speaking countries seem to be treated a little better; as was the case for the United Kingdom. Except for South Africa, which one might have thought was dear to Elon Musk's heart. But it is hit with a heavy additional tax of 30%. Too close to Beijing and Moscow as one of the first members of the BRICS. There remains the even stranger case of Lesotho, the most heavily overtaxed country on the planet with a rate of 50%! Here is this small southern African country, unknown to most Europeans as well as Americans, brutally propelled towards a world notoriety that it would have gladly done without, had it not been for Trump's decision. Why such an outburst against this small kingdom of less than 2 million inhabitants the size of Belgium, and whose main crime, in addition to its very low Human Development Index (HDI) (168th in the world) and record income inequality, is to be the main importer of African clothing to the United States, especially jeans! Maybe Trump wants to re-establish the jeans industry in the United States? But it is also said that in a previous speech, Trump castigated the multi-million dollar aid provided to a country populated largely by LGBT! It is understandable that the king and his government immediately sent a delegation to Washington to negotiate...
Death of AGOA
At this stage, we can therefore think that the free trade agreement between the United States and Africa (AGOA) will, de facto, be abolished a few months before its expiry. This question has already been addressed several times in this column (see in particular CDD 101 of 26 January 2025). So far in the form of a possible scenario. But with the decision of April 2, it seems that the death certificate of the AOA has now been pronounced. Unless there is a spectacular turnaround, of course...
But the fact that southern African countries such as South Africa, Lesotho, Botswana, and Madagascar, which have been major beneficiaries of AGOA until now, are so heavily hit by US tariffs does not prejudge such a turnaround. Only a few months ago, the United States seemed ready to start again for a new ten-year lease, given to AGOA, even seemed to consider its extension to strategic materials. This scenario now seems to be excluded. As if the United States had somehow given up on Africa, at least some of its countries. A prelude to another strategy focused more exclusively on the ores and metals of the future?
What consequences will these countries have to draw from this? Initially, they will try to negotiate, with the support of their regional organizations and the African Union, with AGOA at stake. But everything will depend on what they have to offer for export and their "comparative advantages", which does not argue in favor of textiles, for example, the flagship product of AGOA.
It is therefore likely that many African countries will look for other, less versatile partners. It is not certain that China is the best recourse, except for countries that are already highly dependent on it. The European Union, on the other hand, could make a certain comeback. But the disruptions in the world market are now such that Africa may suffer a major blow in its most fragile parts and see an already threatening horizon darken, where international development aid will continue to become scarce.
Jean-Paul de GAUDEMAR
April 13, 2025
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