Trump's tariffs are sending African countries into China's hands

CNN

5 days ago

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Africa is adjusting to the new reality of US President Donald Trump's tariffs, with countries on the continent facing some of the highest export charges.
But what could become a crisis is an opportunity for United States rival China, which has long courted African countries and is now offering them a lifeline.
'We (Africa) are going straight into the hands of China,' Nigerian economist Bismarck Rewane told CNN.
'That is the unfortunate outcome,' Rewane said of Africa's expected further shift toward China, which has emerged in recent years as the continent's largest bilateral trading partner.
Four African nations - Libya, South Africa, Algeria and Tunisia - face some of the steepest tariffs imposed by the Trump administration, with charges on exports ranging from 25% to 30%.
Eighteen other countries from the continent were hit with 15% levies, a modified tariff package released Thursday by the White House showed.
In April, when the US import levies were first announced, Trump pitched them as 'reciprocal' and targeting countries that he said had trade deficits with the US.
But Trump instead based his tariffs on countries' trade deficits with the United States – not the tariffs they charge.
South Africa, one of the continent's powerhouses, challenged the imposition of a 30% tariff on its US-bound exports, saying Trump's decision was not based on 'an accurate representation of available trade data.'
China has offered to soften the impact of US tariffs on Africa, saying in June it would halt charges on imports for nearly all its African partners.
'There is no other opportunity for African countries to strengthen South-South trade (among developing nations) than now,' South African researcher Neo Letswalo told CNN, while urging countries to 'solely turn to China and make it the next US.'
'America is gradually forfeiting its global leadership status,' Letswalo said, adding that the more countries 'become less dependent on the US, the greater opportunity for China to become an alternative.'
Before the tariff deadline, the US did not make a trade deal with any African nation despite efforts from the continent to avoid the tariffs, underscoring Africa's place on the White House's priority list.
Letswalo described America's failure to negotiate a deal with Africa as 'an open goal for China.'
The impact of Trump's tariffs is already being felt in some of Africa's most buoyant economies and some of the continent's poorest, such as Lesotho, which was slapped with a 15% tariff. It had previously been hit with a 50% tariff – one of the steepest rates – before the charges were modified.
Lesotho's Prime Minister Samuel Matekane said in June that the huge tariff, combined with the halt of US aid to the nation of just over 2 million people, 'have crippled industries that previously sustained thousands of jobs.'
Trump has described Lesotho, a landlocked nation surrounded by South Africa, as a country 'nobody has ever heard of' – even though trade between the US and Lesotho totaled over $240 million last year, mostly in textiles.
Before the tariffs, Lesotho benefited from a US trade agreement that allowed it and other eligible sub-Saharan countries to export goods to the US duty-free.
Authorities in Lesotho have declared a two-year national state of disaster over the tariffs, as the country braces for their impact, with the textile industry already grappling with massive job losses.
Thousands of roles are also threatened in Lesotho's richer neighbor, South Africa, where citrus growers said they were gripped with 'great anxiety' ahead of the August 1 tariff deadline.
In a statement this week, the country's Citrus Growers' Association (CGA) warned that 'job losses will be a certainty' if the tariffs came into effect.
It added that, 'hundreds of thousands of cartons of citrus are ready in packhouses to be shipped to the US over the next few weeks,' and that implementing the charges 'will mean most of this fruit will be left unsold.'
Other industries in South Africa, such as the automobile sector, also face the risk of economic shocks, analysts said.
'Already, we have companies within the automobile sector threatening to leave (the country) as a result of plummeting business,' Letswalo said.
'The tariffs will add to the burden of pre-existing issues, and if these entities decide to exit South Africa, our already existing unemployment calamities will worsen,' he said.
Gwede Mantashe, South Africa's minister of mineral and petroleum resources, told reporters Tuesday that other routes are being sought for South African goods.
'If the US imposes high tariffs, we must look for alternative markets,' he said. 'Our biggest trading partner is China, not the US. The US is number two,' Mantashe added.
As South Africa scouts for broader opportunities, however, the citrus growers' group has voiced its reservations, specifically that their products suit designated markets so finding another is not straightforward.
Its CEO, Boitshoko Ntshabele, told CNN in a statement that 'the US market remains a priority, and so should improving access to China' and elsewhere.
'There is a deep appreciation of South African citrus by US consumers. Since 2017, our exports to that market have almost doubled. The market has immense potential,' Ntshabele added.
Letswalo believes there are accompanying risks behind the enticing option of relying on Beijing to cushion the impact of Trump's tariffs.
Alternating US with China 'could be risky,' he said, 'especially for some nascent industries within the (African) countries.'
'If they're not protected, Chinese products will flood and outcompete them as many African countries are price sensitive markets,' he warned.
China has imposed some imbalanced trade deals of its own in Africa with trade deficits skewed in its favor, according to the China-Global South Project (CGSP), an organization monitoring China's engagement with developing countries.
Additionally, the bulk of Beijing's exports to Africa comprise mainly manufactured products, while the continent's exports to China are commonly raw materials.
South Africa's Ramaphosa advocated for balanced trade with China when he met his Chinese counterpart Xi Jinping in Beijing last year.
Letswalo advised that, while Africa leans on China for trade, it must also seek domestic alternatives.
He recommended a swift implementation of the African Continental Free Trade Area (AfCFTA), an agreement signed by nations on the continent to boost trade among themselves.
Although established in 2020, implementing AfCFTA has been slow, with just over 20 countries of the continent's 55 trading under the deal.
Rewane believes that the US tariffs could inspire Africa 'to build economic resilience and be less dependent on lopsided trade.' Above all, he added, the continent must be 'more inward-looking rather than outward-dependent.'