The EastAfrican

As US President Donald Trump’s so-called reciprocal tariffs took effect, sending shockwaves around the world, the reactions by global leaders were both consistent and varied.

As they condemned the United States’ attack on a global trading system, which has, over the decades, tried to create a fair balance of returns from the wealth generated by commerce, many in the Global North, were also ready to fight back with equal force.

China, by far the country facing the highest US tariffs at 65 percent, fired back imposing its own 37 percent on US imports.

In sharp contrast, African countries, even those targeted with the lowest tariff of 10 percent, cringed in fear, looking more like a rabbit shocked by the headlamps in night traffic.

In the ensuing confusion, prices of cocoa, coffee and sugar futures plunged an average three percent on Thursday as traders girded against the likely impact on demand, were producer countries to retaliate.

One could argue that Africa’s posture of “do nothing” is justified. Heavily dependent on demand for its raw produce by the world’s largest consumer market, the continent lacks a unified or credible response to Trump.

Intra-African trade is still miniscule and populations too poor to replace the lost demand if governments shut out the US. Even if they tried, the infrastructure to facilitate trade across borders cost efficiently barely exists beyond subregional groupings.

Africa’s predicament is also a lesson in contrasts. By any measure, China will take the biggest blow from Trump’s tariffs.

Read: Donald Trump is only telling us to make sense and be seriousYet, even as it joined the global powers in condemning Trump’s attack on the world trade system, Beijing was fairly insulated against the worst of the US action.

China has, over the years, developed a huge and resilient internal market that can help the country rise above the turbulence that US tariffs might create. They have been preparing for this moment and that strategy is set to pay off in the emerging crisis.

In the short term, Africa might not have much leverage in terms of what it can throw back at the US and the instinctive reaction might be to lobby for exemptions. But that is not to say the continent is completely lacking in options.

The most logical response with a huge pay-off down the curve would be to get moving on implementing the African Continental Free Trade Area, AfCFTA, by engaging in whatever trade is possible within the existing infrastructure.

Africa needs to trade more with itself, establish critical soft and hard infrastructure such as roads, rail and waterways; financial institutions such as credit rating agencies, development banks and securities exchanges.

This should be followed by a departure from reliance on exports of raw materials, in favour of industries that first produce goods consumed in Africa. More developed regional value chains will make the continent less dependent on international markets, support currency stability and provide the punch to negotiate new partnerships.

The generous mineral endowment should be used as a bargaining chip to force relocation of manufacturing capacity to Africa, to increase the continent’s share of proceeds from kits mineral wealth.

Trump hopes that he will trigger multinationals to repatriate manufacturing capacity and jobs to the US. That can be reverse engineered. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).