CHINA/US TRADE WAR: Potential Impacts on African Economies

Ever since the revolutionary promise that Trump made to the U.S citizens during his inaugural speech, there indeed have been several changes either implemented or proposed in the US government. Top of the news over the past couple of weeks is the ongoing trade war between the U.S and China which sprouted from Trump’s new tariff policy on imported goods from all countries. With new developments and retaliation from China, the war has only grown worse.

Back-and-forth with U.S. and China Tariffs policy – Analysis by CNN

CNN analysis of the US/China trade war 

When Trump announced new tariff policies on countries exporting to the U.S, it wasn’t necessarily the start of a trade war. However, things escalated when the focus shifted primarily to China, with the U.S hiking tariffs on Chinese goods by more than 100%.

On February 1, 2025, Trump signed an order to impose 10% tariffs on imported goods from China, and 25% on imported goods from Mexico and Canada. Two days after the announcement, he announced a 30-day pause on implementing the 25% tariffs on Mexico and Canada. However, just three days after announcing the new policy, he implemented the 10% tariff policy on all Chinese imports, despite pausing on the other two countries. Same day, China responded by also imposing 15% tariffs on U.S goods, particularly coal and liquefied natural gas (LNG), and 10% tariffs on crude oil and agricultural machinery, large displacement cars and pickup trucks, which was to take effect on February 10.

On February 10, Trump announced 25% increase in tariffs on steel and aluminium imports from all countries. While some countries have retaliated with their own tariffs, Trump, on February 13th, announced an investigation to be undertaken by his administration to levy reciprocal tariffs on other nations. Reciprocal tariff is a tax or trade restriction that one country laces on another in response to similar actions taken by that country. 

On March 4, Trump added additional 10% to the new tariff on China’s imports and 25% tariff on Mexican and Canadian imports, however, with some exceptions for Mexico and Canada and none for China. In retaliation, China included U.S. agricultural product imports to the list, and placed 10 to 15% tariffs on them, making China’s increased tariffs on U.S. imports to affect U.S. Crude oil and agricultural machinery and products, Coal and LNG.

On March 12, U.S’ 25% tariff increase on steel and aluminium imports from all countries took effect and the now 45% increase on all Chinese goods also took effect. On March 26, Trump announced 25% Tariff increase on automobiles which was to take effect on April 3. On April 2, Trump announced a package of so-called “reciprocal” tariffs on dozens of nations, including China which was set to see tariffs increase to 34%, he also announced a 10% tariff increase for all imports to the U.S with exceptions for Mexico and Canada. On April 4, China announced a 34% tariff increase on U.S. goods, to take effect on April 10, and by April 5, 10% universal tariff increase came into effect, putting China’s tariff rate at 30%. 

On April 7, Trump counters China’s retaliatory tariff, threatening a 50% tariff increase in addition to the full 34% reciprocal rate if China does not back off. The following day, Trump again hit China with an additional 84% levy across all imports, raising the total of 104% increase on tariff rates for Chinese imports alone. In retaliation, China announced on April 9 an 84% tariff increase on U.S imports, escalating the trade war between the two largest economies. In retaliation on the same day, Trump also increased Chinese tariff rates to 145% effective immediately. Still on the same day, Trump announced a 90-day pause on reciprocal tariffs for other nations except for China, with the 10% universal tariff remaining in effect. On April 11, China reacts by increasing retaliatory increase on U.S. imports to 125%. Over the course of a week, Trumps tariffs on Chinese imports jumped from 54% to 145% while the president Xi of China has also retaliated in the same vein.

Was Trump Overbearing with the Tariff Hikes?

The independent

Trump’s no-country-is-off-the-hook policy on tariff increase, stems from his protectionist trade policies. Trump’s trade policy during his first term in office (2017 to 2012) was characterised by unilateral measures, aggressive negotiating tactics, and a focus on reducing the trade deficit and protecting U.S industry. His second tenure’s implemented or proposed policies suggest a continuation of the trade policies from his first term in office.

For a long time, the United States have been importing more goods from other countries that it exports to them. This has caused a lot of trade deficits for the U.S, hence, the implementation of the protectionist trade policy by Trump to balance out these trade deficits and protect the U.S economy.

According to the U.S Census Bureau, in 2024, U.S has the largest trade deficit with China, adding up to $295 billion in deficit. Mexico and Vietnam follow China on the list, gaining about $172 billion and $124 billion from their exports to the U.S Other countries that the U.S. suffers trade deficits with include, Ireland ($86.75 billion), Germany ($84.82 billion), Taiwan ($73.93 billion), Japan ($68.47 billion), South Korea ($66.01 billion), Canada ($63.34 billion), India ($45.66).

This makes the U.S' trade deficits with these top ten countries to be approximately $1 trillion. Not to mention the other countries, including African countries that export more goods to the U.S than they import from the U.S

How Would the Trade War Affect Africa?

African Business 

According to the African Export-Import Bank (Afreximbank), frictions between the U.S and China could hit Africans devastatingly even than the foreign aid cuts. Just like other countries, the US has trade deficits with African countries, including Nigeria, South Africa, Algeria, and Angola; because the US imports more African goods than it exports to them.

These countries heavily rely on exporting commodities like oil, minerals, etc. The U.S. imports oil, metals and platinum from Nigeria, with Nigeria and South Africa being responsible for over half of those imports in Africa. A little general increase in tariffs by the US would be manageable, however, the unending trade war between China and US could lead to trade diversion which could in turn lead to economic instability in Africa.

China has been the primary market for many African commodity exports, including oil, coper, cobalt and agricultural goods. Hence, the trade war could cause a reduction in Chinese demands from Africa and consequently, lower export revenues for Africa, especially the resource-dependent nations. Whilst China tries to adjust from and curate a suitable balance amidst the new development in tariffs, it could put a little hold on its outward investment strategy. Therefore, some African countries’ reliance on China for capital for critical infrastructure development, could face a contraction in external financing.

Final Thoughts

An African adage says, ‘When two elephants are at war, the grasses on which they stomp suffers more’. This is the case of the US president, Donald trump and Chinese president, Xi Jinping lately, and from the look of things, the war is not ending soon.

Without doubt, China has been the world’s factory power. It has produced the highest number of imports ranging from household items to clothing and shoes, electronics and raw construction materials, to appliances and solar panels. Trumps declaration of trade war is the beginning of a new dispensation for the global economy. While both powers have continued to engage in a seeming unending tussle, investors, businesses continue to suffer not only from the super hiked tariffs but also from the fluctuating stock market due to the vastly changing decisions from these two powers.

Whilst we continue to spectate the fight of these two, we await the turn of events. Did Trump do wrong by asking for a balanced trade relationship with countries and reducing US’ trade deficits? Can America survive without supplies from China? Can America really do without years of rare earth exports to the US knowing that the cut off might lead to blocking certain critical components used in U.S. weapons systems?