Africa prepares to navigate Trump’s trade wars

African leaders have long been aware that President Donald Trump’s return to the White House has the potential to create massive political and economic disruption on the continent. For the best part of a decade, Trump has been in or around the US presidency, openly pledging to wage trade wars on America’s competitors and allies alike and to upend the multilateral world order, creating challenges and potential opportunities for African countries in the process.

However, few would have expected that South Africa’s domestic politics would be in Trump’s line of sight less than two weeks into his presidency.

Trump’s post on his “Truth Social” website condemning South Africa’s land expropriation bill – which allows private land, mostly unused, that is owned mainly by white Afrikaners, to be seized by the government without compensation under carefully defined circumstances – brought an issue which has been bubbling away quietly for several years to the top of the diplomatic agenda.

“South Africa is confiscating land, and treating certain classes of people VERY BADLY. It is a bad situation that the Radical Left Media doesn’t want to so much as mention. A massive Human Rights VIOLATION, at a minimum, is happening for all to see,” Trump wrote.

“The United States won’t stand for it, we will act. Also, I will be cutting off all future funding to South Africa until a full investigation of this situation has been completed!”

While Trump’s condemnation of land expropriation – and his subsequent offer of refugee status for Afrikaners – did not come entirely out of the blue, Pretoria was nonetheless shocked at the speed with which it became a focus for the Trump administration.

Mohamed Cassimjee, a former South African diplomat who now works as a geopolitical consultant in the UK, says that the episode demonstrates a “more ideological” approach to global affairs from a president who has previously been seen as mostly transactional in his approach to foreign policy.

“What I noticed in this reaction to South Africa is that they have now added another, more ideological element… The lines between foreign policy and domestic policy are being blurred.”

The risks of Trump unbound

The ongoing dispute will be watched closely by leaders in capitals across the continent as they seek to draw lessons about what Trump’s disruptive approach to foreign policy and international trade may mean for them over the next four years.

Many were already concerned that Africa could be snared in the global fallout of Trump’s aggressive approach to trade, not least his fondness for tariffs, which he sees as a tool both to further US foreign policy goals and to rectify the country’s trade deficit.

Within weeks of assuming the presidency, Trump had announced sweeping tariffs on China, Canada, and Mexico (the latter two initially postponed) and pledged to consider tariffs on the European Union.

Most had expected that African countries would avoid direct tariffs as the US runs only a small trade deficit with the continent and, at least for now, appears more focused on competing with larger powers such as Beijing. In 2024 the US trade deficit with Africa was $7.4bn – compared to an almost $300bn deficit with China in the same year.

Furthermore, in 2023, 85% of the US trade deficit with countries covered by the African Growth and Opportunity Act (AGOA) came from just three of these – South Africa, Nigeria and Ghana. These countries’ primary exports, notably platinum and crude petroleum, are critical resources for which there is high demand in the US, which would appear to make tariffs self-defeating.

However, Menzi Ndhlovu, political risk analyst at Signal Risk in Cape Town, says that the South Africa dispute shows that tariff policy may be dictated by more than economics.

He thinks that Africa needs to prepare for a more ideological Trump who is not shy in using America’s political and economic pre-eminence to force compliance.

Tariffs on South Africa and other African countries that draw the president’s ire “should not be ruled out, especially if the relationship continues to deteriorate,” he warns – and says the costs could quickly escalate.

“If you impose tariffs on South Africa, you are effectively imposing tariffs on most of Southern Africa. Zimbabwe and Botswana, which are landlocked, and Namibia, which does not have access to sophisticated ports, all tend to trade through South African ports,” he notes. “There would be negative economic repercussions for most of the region.”

More directly, Africa also stands vulnerable to any bid to alter or repeal AGOA, which provides tariff-free access to the US market for African manufacturers from a range of compliant countries. At the very least, Trump could remove countries from the scheme, such as South Africa, which do not align with Washington DC’s foreign policy goals.

Africa risks being caught in the crossfire

Even if these scenarios do not come to pass, Africa more broadly remains exposed to the risks associated with a more disrupted and fragmented international trading landscape. In his first few weeks in office Trump imposed a 10% tariff on all imports from China. Beijing responded to this with a 15% tariff on US coal and liquefied natural gas (LNG) imports and a 10% tariff on American crude oil and agricultural machinery.

At the start of February Trump also imposed a 25% tariff on all imports from Canada and Mexico, with a lower tariff of 10% on Canadian energy imports, but these were postponed for a month after negotiations aimed at ensuring both countries stepped up their efforts to stop illegal drugs entering the US. Tariffs on Canada and Mexico were eventually reimposed on 4 March.

Trump has also put in place a 25% tariff on all steel and aluminium imports globally, effective from March. In 2023, South Africa exported over $400m worth of iron and steel to the US and almost $600m worth of aluminium. Mozambique, Egypt and Nigeria also all export aluminium to the US to varying degrees, raising concerns about what these trade restrictions will mean for their domestic producers.

And even assuming there are no direct tariffs on African countries – although that is possible – Africa still stands at high risk of being caught in the crossfire. According to the International Monetary Fund (IMF), global “geoeconomic fragmentation” resulting from trade barriers could wipe off 4% of sub-Saharan Africa’s GDP – double the losses faced by the rest of the world.

“In a scenario in which the world splits into two trading blocs around the European Union and the United States versus China, sub-Saharan Africa would lose access to key export markets and experience higher import prices,” the IMF writes. “The median sub-Saharan African country would face a permanent decline of 4% of real GDP after 10 years relative to a no-fragmentation baseline.”

Cassimjee says “Africa needs the world to be open” and that economic fragmentation would be “very negative for Africa.

“Just as Asia grew by being able to export, Africa needs a free trade environment without too many tariffs and trade restrictions. That is absolutely vital for development.”

Analysts have raised fears that Trump’s pledge to wage trade war on Beijing could reduce growth within China. The investment bank Goldman Sachs has forecast that the tariffs will have an immediate impact by subtracting almost 0.7% from China’s growth in 2025. More substantial decreases are not ruled out should Trump increase tariffs further or bring in more measures such as ending the US designation of permanent normal trade relations (PNTR) with China, which dates back to 2000.

Weaker growth in China could be particularly felt by African countries such as Zambia, Angola and the Democratic Republic of the Congo, which rely on Chinese demand for copper, oil and cobalt. A weaker Chinese economy would likely dampen demand for these commodities, potentially leading to lower prices on global markets and revenue losses for African exporters.

Copper – of which Africa is a leading producer, having produced 3.6m metric tonnes of the commodity in 2023 – is particularly sensitive to trade wars as a crucial industrial metal used across industries. Unsurprisingly, the commodity has experienced considerable price volatility since November’s election. ING Bank has noted that “tariffs are bearish for copper and other industrial metals in the context of slowing global growth and keeping inflation higher for longer.”

Inflation fears

Ndhlovu also fears that Trump’s tariffs will have a “global inflationary effect”. Tariffs on China in particular could distort supply chains and disrupt trade around the world, leading to goods shortages and higher prices.

The advisory firm Oxford Economics has estimated that tariffs will reduce global trade value by over 7% by 2030, compared to pre-election forecasts. While it is difficult to forecast exactly how much this will increase global inflation, most analysts agree that higher prices are now highly likely.

“Africa is struggling at the moment because of the round of inflation that arose due to the crisis in the Red Sea and the conflict in Ukraine,” Ndhlovu tells African Business. “Another round of global inflation would have very significant consequences on African economies. I don’t foresee there being any way to absorb reinflation apart from another round of interest rate hikes across the continent, which would come at a very inopportune time.”

“We are still recovering from the shock of the Red Sea and Ukraine, and these were supposed to be the years where we would expect some kind of upswing in growth,” he says.

“You raise rates and you dampen the prospect of an upswing. It’s very difficult to see how Africa would protect itself from another round of inflation.” Since the US election in November, the central banks in Rwanda, Egypt and Tunisia have declined to ease monetary policy, partly because of these expected inflationary pressures, some analysts believe.

A study from the University of Chicago has indicated that US prices on imported goods could rise by 10% over the next twelve months. Ndhlovu also points out that that would mean that interest rates in the US are unlikely to be lowered, and could increase. This would in turn play into a stronger dollar, something Ndhlovu says would be “devastating” for African economies.

“A number of African sovereigns are facing maturities over the next five years and those maturities are denominated in dollars,” he says.

“At the same time, countries like Mozambique, Zambia and Kenya are also facing substantial dollar liquidity constraints. If the dollar goes up, we are effectively going to have to pay a higher rate on our debt.”

“Our repayment costs are going to skyrocket, which is a massive challenge for African countries facing severe fiscal constraints and balance of payments constraints. We’re probably not going to get any debt forgiveness with Trump in power either.”

Insulating Africa from the fallout

How can Africa protect itself from these risks? One suggestion has been to harness the potential of trade within Africa through initiatives such as the African Continental Free Trade Area (AfCFTA).

While some experts forecast that the AfCFTA could double intracontinental trade by 2035, the amount of trade happening through the scheme currently remains limited, making it hard to envisage it as the immediate answer to a more fractured global trading landscape.

Another option is that Africa could seek to diversify its trading and political partners to reduce its dependence on the US, such as by engaging with new institutions such as the BRICS group of emerging economies, of which South Africa, Egypt and Ethiopia are already members.

However, this is easier said than done. Trump has struck an aggressive stance towards the BRICS and threatened major repercussions should it attempt to diversify away from the US in a meaningful way, such as attempting to reduce the power of the dollar as a global reserve currency.

In February the president said that “BRICS is dead” after threatening to impose tariffs against the group should they attempt to dedollarise. Ahead of a meeting with India’s Prime Minister Narendra Modi, Trump said “if they want to play games with the dollar, they’re going to be hit with a 100% tariff.”

Ndhlovu says that antipathy to countries looking to group together to weaken US interests has also driven the recent antagonism towards South Africa.

“He is also trying to use South Africa as an example to deter wider trends around the world – specifically among emerging markets demanding broader multilateral reform, such as new currency configurations and dedollarisation,” he says. “South Africa is a big enough country to warrant attention but also weak enough that it can be punished easily. South Africa makes for a very good whipping boy.”

Cassimjee believes that it could be possible for Africa to play a “balancing act” – keeping the US on side through “nimble diplomacy” while also seeking new partners elsewhere.

“Africa has leverage too. It is a huge consumer market for the US. There is also the issue of migration – if Africa does not develop, that will impact the US. Africa has critical minerals that the US needs, and there is also a geopolitical element, given the issue around Russia and China’s increased influence on the continent,” he explains. “Would the US want to jeopardise all this by taking on such an extreme position?”

Alex Vines, head of the Africa programme at UK thinktank Chatham House, adds that “critical and strategic minerals supply chains are a key Trump administration priority and this will be one area of enhanced engagement on the continent,” something which could empower African leaders during any potential negotiations with the US.

Read the room, engage with Trump

Ndhlovu is, however, more pessimistic and suggests that, with no obvious partners available to replace the US, Africa may simply have to get used to navigating Trump’s demands and try to minimise the damage.

“Europe is no longer as powerful and economically capable as it once was – it is in disarray with the political tensions that are going on. They have got a demographic crisis and a productivity crisis and not enough capital to deploy outward to Africa,” he says. “We have also seen a tapering of Chinese investment towards Africa and China has its own domestic economic constraints. Countries that could potentially step into the gap have relatively limited capacity.”

“I think the best thing we can do as Africans is to read the room and be a bit smarter about how we navigate Trump. He can be unpredictable and erratic but, with a little bit of political savvy, you can at least avoid some of the backlash,” Ndhlovu notes.

“It doesn’t necessarily mean you agree with what he is doing but what matters is the state of your country and economy. It does require some compromise with our values – but as much as values are important, they don’t fill bellies.”

Africa as an opportunity for the US

With all that said, there are signs that some figures in the Trump administration recognise the potential benefits that increased commercial and political engagement with Africa could bring.

In January, US secretary of state Marco Rubio pointed out that Africa’s population is set to double by 2050. “That isn’t just an interesting number. That’s also markets. Those are also consumers. Those are places that I think provide an extraordinary opportunity, properly positioned, for America to become more prosperous,” he said.

African leaders will be seeking to emphasise that opportunity – and the continent’s vital importance to key strategic issues such critical minerals supply chains – in their engagements with the US. But it remains to be seen how well Africa will be able to weather the storm during this incoming period of economic and political fragmentation.