Timothy Alexander Guzman, Silent Crow News – The US has started a global trade war with the world targeting every region including the poorest countries in Africa. What is interesting is that one of the countries that Trump is targeting is Lesotho who according to an article published by allafrica.com, ‘Africa: Twenty African Countries, Including Poorest, Hit with High Trump Tariffs’ says that “The country that President Donald Trump declared “nobody’s ever heard of” during his 4 March address to Congress has been hit with the highest U.S. tariffs in the world. Lesotho tops the list of 20 African nations upon which the White House has announced what it calls “reciprocal” tariffs, which add to the baseline imposed on every country.”
Trump’s tariffs or what should be rightly called, taxes are imposed on countries that the US has trade deficits with which are vast. The idea is to forcibly bring back manufacturing companies and jobs back to the US because the Trump administration claims that “for generations, countries have taken advantage of the United States.” The White House posted a fact sheet on its website titled ‘Fact Sheet: President Donald J. Trump Declares National Emergency to Increase our Competitive Edge, Protect our Sovereignty, and Strengthen our National and Economic Security’ which one of the items mentions South Africa:
For decades, South Africa has imposed animal health restrictions that are not scientifically justified on U.S. pork products, permitting a very limited list of U.S. pork exports to enter South Africa. South Africa also heavily restricts U.S. poultry exports through high tariffs, anti-dumping duties, and unjustified animal health restrictions. These barriers have contributed to a 78% decline in U.S. poultry exports to South Africa, from $89 million in 2019 to $19 million 2024
According to allafrica.com:
Retaliation for “health restrictions” is not limited to Africa.
For example, U.S. Secretary of Commerce Howard Lutnick complained yesterday that the “European Union won’t take chicken from America…They hate our beef, because our beef is beautiful and theirs is weak” – a comment that inspired a predictable spate of caricatures and jokes on social media. The European Union has barred imports of U.S. beef under a 1989 health regulation that banned the use of growth hormones in the EU
One of the reasons the EU banned US beef products is because they are simply unhealthy but that is another issue. The article mentions Mark Stone, a Sky news correspondent said that the math doesn’t make sense at all, the calculations are way off “by very questionable White House arithmetic” and a claim that Lesotho levied U.S. imports at 99 percent was a “wild claim” and “In fact, it’s part of a southern African trade pact with other nations which have been levied at lower levels. Lesotho’s textile industry is heavily reliant on U.S. exports. It’s a country where 56.2 percent of the population lives on less than $3.65 a day, according to the World Bank. You don’t need to ‘do the math’ to see the impact.”
In an analysis by allafrica.com, ‘Lesotho Hit with Highest Tariff in the World by Trump’ under the AGOA or the African Growth and Opportunity Act which was approved by the US Congress in 2000 to create an economic relationship between sub-Saharan African countries and the US:
The tariff on Lesotho highlights growing tensions between the U.S. and Africa over trade fairness and development strategy. The country’s largest exports–apparel and diamonds–had benefited from U.S. duty-free access under AGOA, a cornerstone of U.S.-Africa trade policy for two decades. Lesotho’s export-led strategy, developed in part with U.S. support, has helped create manufacturing jobs in a country where many youth migrate to South Africa in search of work. Now, with a 50% tariff, its competitive edge in the U.S. market is at risk. Economists warn the tariffs could undermine efforts to foster industrialization in Africa. Bloomberg Africa economist Yvonne Mhango said targeting Lesotho–despite its small size and strategic dependency on exports–runs counter to Washington’s past trade and development messaging. If other AGOA beneficiaries face similar recalculations, it could accelerate Africa’s pivot toward trade partners offering more stable market access, including China, the EU, and Gulf nations
Trump’s tariffs will accelerate Africa’s push to join the BRICS alliance. The American Enterprise Institute (AEI), a center-right think tank based in Washington, D.C. criticized the White House formula that calculated the tariff rates published, ‘President Trump’s Tariff Formula Makes No Economic Sense. It’s Also Based on an Error’ say that the rates are overexaggerated:
The formula for the tariffs, originally credited to the Council of Economic Advisers and published by the Office of the United States Trade Representative, does not make economic sense. The trade deficit with a given country is not determined only by tariffs and non-tariff trade barriers, but also by international capital flows, supply chains, comparative advantage, geography, etc.
But even if one were to take the Trump Administration’s tariff formula seriously, it makes an error that inflates the tariffs assumed to be levied by foreign countries four-fold. As a result, the “reciprocal” tariffs imposed by President Trump are highly inflated as well.
Though in effect the formula for the tariff placed on the United States by another country is equal to the trade deficit divided by imports, the formula published by the Office of the US Trade Representative has two additional terms in the denominator that just so happen to cancel out: (1) the elasticity of import demand with respect to import prices, ε, and (2) the elasticity of import prices with respect to tariffs, φ.
This will accelerate Africa’s pivot to Global South nations in the BRICS alliance. In 2024, Africansights.com published ‘BRICS’s Growing Influence: How New Partnerships Are Redefining Africa’s Economic Future in 2024’ gives a perspectiveon what African nations hope to achieve by joining BRICS which is to break their dependence on the West:
African nations’ growing interest in BRICS membership stems from a deep-seated desire to reduce their historical dependence on Western financial institutions and power structures. Many African leaders have expressed frustration with what they perceive as economic exploitation by traditional partner countries and the often-stringent conditions imposed by Western-led financial institutions like the International Monetary Fund (IMF) and World Bank.
The New Development Bank (NDB), BRICS’ financial arm, has emerged as a promising alternative for African nations seeking to escape the dollar-dominated global financial system. This is particularly significant for countries facing restrictions from traditional lending institutions, such as those under military governments that came to power through coups
Most African nations will join BRICS at some point in time. Africa should not depend solely on the US economy for trade; they should establish partnerships with countries who are reliable and economically stable that can be trustworthy. Trump’s tariffs from last week, or this week and in the foreseeable future are erratic.
But besides tariffs on imports and exports, any company or investor who is thinking about opening a manufacturing company in the US, which is why Trump has imposed a global tariff in the first place, will take time, perhaps months or even years because they will need a significant investment with a stable supply chain to build a factory and this does not include all the taxes they will have to pay on top of everything else. Trump’s economic policies are incoherent, they don’t make sense, so why would anyone in their right mind want to operate a manufacturing company in the US?
However, African nations who are on Trump’s tariff list surely will be looking for new trading partners to do business with. African countries want to trade with counties who don’t use a stick to try to enforce some sort of tax on their products which will lead to less demand because it is the US consumer who will pay a higher price in the end, therefore demand for African products would decrease over time so it will be a lose-lose situation for Africa, so it is that time for them to move on into a direction that will be beneficial for their companies, workers and consumers in the long term.
