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Can Africa’s trade with China and the EU counter US tariffs?
Africa Confidential
African trade officials are changing strategies urgently in the wake of the tariff tsunami, ranging from 10%-30%, imposed on 1 August on their exports to the United States. Most governments are concentrating their focus on the three alternatives to the US market: China, the European Union and the African Continental Free Trade Area. But none will offer a quick fix for the financial losses caused by the US tariffs.
Hardest hit will be South Africa: the US is its third biggest trading partner and market for 7.5% of its exports. That puts at risk 100,000 jobs and about US$10 billion in revenues. That is the worst outcome on the continent, but most economies will take a hit. The US is now Africa’s third biggest trading partner, behind China and the EU, and likely to head south after the tariffs – apart from those countries with bountiful reserves of critical minerals.
Kenya is one of Africa’s few net importers from the US to the tune of just under $100 million. But some Republican politicians have been calling for Kenya to be stripped of its non-NATO ally status with Washington due its close commercial ties with China. That is unlikely to slow China’s economic expansion in Kenya and the wider region. Contrasting its policies with the prospect of higher US tariffs, China offered tariff and quota-free trade to all African states in June. The EU plans to boost African investment via its Global Gateway programme, focusing on energy and critical raw materials.
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