President Donald Trump’s return to the White House has reignited global trade tensions, and Africa, though not directly targeted, won’t be spared! Earlier this month, President Trump imposed sweeping tariffs: a 10 percent global levy on all imports, 34 percent on Chinese goods, and 20 percent on imports from the EU. It is perhaps the boldest protectionist move since the 1930s by the United States. Since then, we have seen retaliatory moves from countries like China, and the US is not backing down now, further raising tariffs on imports from China.
The headlines may be focused on the US, China, and maybe the EU, but Africa is in the blast radius.
First, the economic fallout is already visible. Global supply chains are tightening again. Costs are rising. We’ve seen markets crashing to levels not seen since Covid as investors digest the implications and assess the impact of these developments on the global economy. Will the global economy slip into recession as a result? What would be the likely response from central banks and policymakers?
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For Nigeria and other import-dependent economies, it means more inflation, on top of what was already painful in our case since President Tinubu came into office and removed subsidies on fuel and FX.
At the same time, currencies are weakening. The Naira, already battered, is under renewed pressure as investors are selling off. A strong dollar, falling exports, and global investor caution are pushing local currencies down, making essential imports even costlier. The Naira has lost close to N100 over the last three trading days, and the CBN is intervening to supply dollar liquidity and quell any major concerns.
To calm markets and contain inflation, countries are likely to start hiking interest rates, which might choke off credit and ultimately slow growth. Nigeria’s central bank is walking a tightrope — fighting inflation without collapsing what’s left of real-sector momentum. Can the economy afford further tightening, given the scale of what was done in 2024?
There’s also a missed opportunity. In theory, when China and the EU lose access to the U.S. market, others can step in. But Africa simply isn’t ready. We don’t yet have the infrastructure, manufacturing base, or trade coordination to fill the gaps. That’s not just a lost economic chance — it’s a reminder of how vulnerable we still are.
Meanwhile, China is likely to double down on Africa, looking to strengthen its foothold as it repositions in response to U.S. tariffs. That could mean more financing, more projects, more trade — but also more debt exposure and dependency on external support.
Read also: Trump tariffs imposed on uninhabited islands where just penguins live
So, where does this leave us?
These new tariffs are a global alarm bell. They remind us that Africa — and especially Nigeria — must stop relying on fragile global trade dynamics. We need to produce more, trade more within the continent, and build shock-resistant economies for a more sustainable future.
The African Continental Free Trade Area (AfCFTA) is our best bet. If there was ever a time to accelerate its implementation and invest in regional supply chains, it’s now. This isn’t just about shielding ourselves from Trump’s tariffs. It’s about claiming a real place in the global economy — and on our terms.
Because— let’s be clear—the world is changing fast. And if Africa doesn’t adapt, it will be left behind — again.
Hakeem Muhammed, CFA, is the Executive Director, Global Markets and Institutional Banking, FSDH Merchant Bank
