United
States President Donald Trump is pushing ahead with punitive unilateral trade
tariffs that are now threatening the stability of the global economy.
From
American major trading partners such as China, the European Union and Canada to
smaller trading nations in the Global South such as Lesotho, Cambodia and Benin,
the tariffs are already causing chaos in the global trading systems not seen in
a century.
Some
developing countries were already experiencing economic difficulties as a
result of the discontinuation of the USAID programmes.
Yet, nothing could have
prepared poor countries for the kind of economic fallout ushered in by the
Trump tariffs.
International trade, not aid, has been the lifeline of many
economies and the US remains one of the leading importers of goods and
materials from around the world.
Yet,
President Trump has taken the trade war to the doorstep of its international
partners. From the 10 per cent baseline increase in tariffs for all countries
to as high as 104 per cent imposed on China’s exports; the world is still
grappling with the real rationale driving US leader’s apparent erratic economic
behaviour.
Trump
accuses other countries of stealing jobs from America. However, the US still
remains the most competitive of the developed countries.
It has the highest
gross domestic product growth among mature economies while the US citizens
still enjoy very high quality of life compared to their contemporaries. Trade
in goods and materials that Trump has now turned his attention to, account for
just 30 per cent of the US economy with the rest, relying on trade in services.
It
is not just other countries that are unhappy with Trump. American citizens have
poured into the streets to protest the activist and seemingly artificial
intelligence-generated interventions. Consumer prices are already going up in
the US, while the stocks are stumbling in the backdrop of new tariff
announcements.
In
a world where the US is no longer the soul anchor of the global economy and
politics, strong powers such as China are already taking measures to remedy the
impact of Trump tariffs.
Beijing has responded with a reciprocal 84 per cent of
taxes on US goods entering the Chinese market. China has also restricted export
of rare minerals to the US while instituting regulatory measures against US
companies operating in China.
China
and the EU have also agreed to coordinate global response to Trump’s tariffs in
order to safeguard international trade. This is laudable because it blunts the
prevailing notion from Washington that globalisation is equal to
Americanisation.
China, for instance, contributed more than 30 per cent to
global economy in 2023 compared to America’s 11 percent.
But
not all countries have the power and gravitas to look into the eyes of Trump
like China or the EU. For countries in the Global South, it is important that
they support international consensus to defeat Trump’s tragic experiment on
global trade.
Because, if Trump succeeds, emerging economies will be most
affected. Inflation will soar. Productivity will dwindle. Jobs will be lost and
livelihoods will be devastated.
In
the meantime, African countries should consider diversifying trade away from
the US. Strengthening intra-continental trade under Africa Continental Free
Trade Area is critical. Similarly, instead of focussing on closing doors, why
not strengthen trade ties with more responsive partners like China? Beijing
overtook the US as Africa’s largest trade partner in 2009.
In 2024, China-Africa
total trade was valued at $282 billion against total trade between the US and
Africa valued at $75 billion.
Additionally,
at the 2023 Forum on China-Africa Cooperation, Beijing announced duty free
entry of goods from 33 least developed countries in Africa – a huge contrast to
ceiling high tariffs slapped by Trump on poor countries like Lesotho.
The writer is a scholar of international relations
with a focus on China-Africa development cooperation. X: @Cavinceworld
