As sweeping tariffs unsettle Europe, African exporters confront rising costs, eroded preferences, and an urgent push for continental unity.
In his first 100 days back in office, President Donald Trump has unleashed an “America First” agenda that European Union leaders describe as “unlike anything else we’ve seen before,” forcing Brussels to scramble for new diplomatic and economic strategies as alliances fray under unpredictable tariff and security dynamics. The administration’s abrupt imposition of reciprocal tariffs—ranging from a baseline 10% duty to specific levies of up to 50% on goods from partners with higher barriers—has drawn sharp criticism for undermining global trade norms and injecting volatility into markets.
African economies, long positioned as beneficiaries of the African Growth and Opportunity Act, now face a stark reversal as the U.S. average duty rate leaps to 24%, nullifying preferential access and subjecting key exports from countries such as Lesotho, Madagascar, and South Africa to steep charges of 30% to 50%. This abrupt shift not only jeopardizes sectors like textiles and agriculture but also threatens to dismantle the multi-billion-dollar value chains built under AGOA’s duty-free framework, effectively signalling the premature end of a decade-spanning development pact.
Ripple effects are already surfacing in African markets as manufacturers absorb higher input costs for steel, aluminium, and imported machinery, squeezing profit margins and stoking inflationary pressures that could reverberate through apparel, agro-processing, and assembly industries. In Zambia, for example, the kwacha slid to record lows against the dollar when tariffs kicked in, underlining the currency risks African exporters and importers must now manage amid heightened uncertainty. Meanwhile, South Africa’s rand experienced one of its most intense volatility episodes since early 2020 as markets digested the pause and then resumption of country-specific import duties.
On the macroeconomic front, the International Monetary Fund has trimmed its 2025 growth projection for Sub-Saharan Africa to 3.8%, highlighting the drag from elevated borrowing costs, tighter external financing conditions, and eroded fiscal space in commodity-reliant economies. At the IMF’s Spring Meetings press briefing, African Department officials urged governments to accelerate domestic revenue mobilisation—broadening tax bases and enhancing collection efficiency—to shore up budgets and safeguard public investment against external shocks.
In response to these headwinds, African policymakers and business leaders are ramping up efforts to operationalise the African Continental Free Trade Area, aiming to boost intra-African commerce, diversify export markets, and build resilience against external trade turbulence. Simultaneously, there is a concerted push toward downstream value addition—transforming raw commodities into finished goods on the continent—to capture higher margins and insulate regional industries from raw-material price swings. Multinational brands and investors are exploring near-shoring and strategic partnerships within Africa to mitigate tariff exposure and spread risk across a broader network of trade corridors.
By embracing regional integration, bolstering fiscal buffers, and realigning supply chains, African stakeholders can navigate this tariff tempest and potentially emerge more unified and competitive, turning current challenges into catalysts for sustainable growth across the continent. Continuous adaptation and strategic foresight will be crucial as the America First era reshapes global trade architecture and tests Africa’s economic resolve.
