strengthening trade and investment relations with Africa. What are the likely impacts of the new direction of US trade policy on Africa economies? What is the AfCFTA’s progress and what key tasks remain? How can G20 leaders best help? IMPLICATIONS OF MR TRUMP’S RECIPROCAL TARIFFS Starting on 2 April this year, the US administration charged so-called reciprocal tariffs on African coun- tries, culminating in a spike of 47% for Madagascar. Currently 18 African countries face 15% tariffs; 32 coun- tries face 10%; Algeria, Libya and South Africa are charged 30% respec- tively; and Tunisia faces 25%. Many commodities, for example petroleum, critical minerals, metals, certain chemicals and energy products, have been exempted, which shows that the US still behaves like most indus- trialised countries – tariff escalation is meant to protect domestic added value. This is likely to be amplified by the negative long-term implications of the erosion of trade policy norms and the multilateral trading system. The short-term implications for African businesses exporting value-added goods are serious. Given AGOA’s limited success with creat- ing industrial capacity in Africa this is ironic. Countries that created a manufacturing sector dedicated to exporting to the US, such as South Africa’s wine and car industry and Lesotho’s jeans factories, will suffer reduced exports and job losses. The answer for African govern- ments is obvious: diversify. One avenue already pursued by South Africa is to align closer to the BRICS+ community, notwithstanding diffi- culties with accessing some of those markets. Other countries will follow. Another option is to move closer to the European Union, but that requires the EU to be willing to seize this chance. The natural option is to engage in more intense intra- African trade. THE AFCFTA’S PROGRESS The foundation of the AfCFTA led to the largest free trade area in the world, comprising 54 states. The start
six years ago was promising, but lim- ited progress has since been made. One reason is that the negotiations about rules of origin are complicated, against the background of eight regional economic communities. Considering these difficulties, eight countries started the Guided Trade Initiative in 2022. More than 30 coun- tries are interested in joining. Intra-African trade consists mainly of manufacturing, whereas most African exports to the rest of the world are commodities. Given the end of both AGOA and USAID sup- port for Africa, the AfCFTA can provide a key to deepen intra-African relations and boost industrialisation. African governments should use this wake-up call from Washington to fix the AfCFTA and get it working. CAN G20 LEADERS HELP? South Africa has the 2025 G20 pres- idency, hosting the Johannesburg Summit in November. The US, which will send Vice-President JD Vance to participate at the Johannes- burg Summit, has already stated its intention not to convene G20 trade ministers when it takes the chair from South Africa for the 2026 presidency. Therefore, South Africa should use the Johannesburg Summit to discuss multilateral trade issues without the presence of President Trump, while encouraging other African countries to step up. G20 members, especially the EU as the most attractive large market, should seize the opportunity to engage in serious trade talks with Africa with a view to deepening exist- ing market access schemes. From an African perspective, the new US tariffs are a serious threat, particularly in the short to medium term through lost export market access and potentially slower US growth, combined with longer-term negative systemic impacts. However, changing US trade policy may offer chances. African govern- ments and businesses can shift to other markets, on the continent, and elsewhere such as China, BRICS+, the EU and other G20 members. It now depends on African countries as well as on G20 members to make the best of the new geo-economic environment.
// PETER DRAPER Peter is a professor and the
executive director of the Institute for International Trade in the School of Economics and Public Policy at the University of Adelaide. He also directs the Jean Monnet Centre on Trade and Environment. He is a board member of the Australian Services Round- table, a director of the board of trustees of the International Chamber of Commerce’s Research Foundation, a non-resident senior fellow of the Brussels-based European Centre for International Political Economy, and an associated researcher at the German Institute of Development and Sustainability.
// ANDREAS FREYTAG Andreas Freytag is a professor of economics at the Friedrich Schiller University Jena, honorary professor at the University of Stellenbosch and visiting professor at the Institute of International Trade at the University of Adelaide. He is also director of Tutwa Europe. He is also founding member of the G20 Trade and Investment Research Network. In 2023, Freytag was a DAAD Fellow at the American German Institute at Johns Hopkins University in Washington DC. He has a weekly column on wiwo-online , a German magazine.
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