The trade disruption caused by President Trump’s use of tariffs has heightened global policy uncertainty. Trade unpredictability is especially harmful for African markets, which rely heavily on foreign direct investment. How can the continent safeguard its economies and secure its role in global trade? Hany Besada outlines three strategies to help protect not only Africa, but the global south.
The United States has unleashed a wave of tariffs as a tool to address trade imbalances, assert national economic interests and leverage geopolitical power. This renewed wave of global tariffs is reshaping global trade dynamics. Under the guise of protecting domestic industries and reducing dependency on global supply chains, these unilateral moves mark a significant shift in the international economic order. The implications are far-reaching. Countries in the global south, particularly in Africa, are likely to experience substantial consequences.
Africa and the global trade web
African nations are deeply integrated into global trade and investment networks. Many of them rely heavily on exports of raw materials and intermediate goods to countries now facing US tariffs. In turn, these countries re-export value-added goods to the US and other major markets. The imposition of new tariffs or the threat of future restrictions injects uncertainty into these trade flows, affecting production planning, pricing, and long-term investment strategies. Africa’s dependence on external markets, whether through exports, remittances or aid, makes the continent particularly vulnerable to global economic shocks.
The chain reaction
One of the most immediate consequences of US tariffs is the disruption of global supply chains. African economies, particularly those involved in manufacturing and processing sectors, may see reduced demand for their raw materials and inputs. South Africa’s automotive and mining industries, Kenya’s horticulture sector, and Nigeria’s petroleum exports are all linked to global value chains that may contract as US-targeted partners reorient their production or lose competitiveness. For example, South Africa’s automotive industry, which exports vehicles and components to Europe, the US and Asia, is indirectly connected to Chinese and Mexican suppliers. If those suppliers are squeezed by US tariffs, production slowdowns will cascade down the supply chain, reducing demand for South African inputs.
The price of protectionism
Many African countries are heavily dependent on the export of commodities such as oil, gold, platinum, coffee, cocoa and others that are sensitive to global demand fluctuations. When tariffs create distortions in international markets, commodity prices tend to swing unpredictably. In periods of uncertainty, investors often shift capital away from riskier markets, exacerbating exchange rate volatility and weakening fiscal positions. For instance, Ghana and Côte d’Ivoire may suffer if cocoa prices fall due to reduced European and Asian confectionery demand. This dynamic threatens to reverse progress in fiscal consolidation, heighten balance-of-payment pressures, and challenge debt sustainability in countries already grappling with limited fiscal space.
Investment sentiment in jeopardy
Tariffs and broader trade tensions inject a high degree of policy uncertainty into the global economy, something that investors notoriously dislike. In African markets, where political risk already weighs heavily on investment decisions, trade unpredictability further undermines investor confidence. Multinational firms may adopt a “wait and see” approach, deferring investment or shifting capital toward markets perceived to be more stable or insulated from trade disruptions. This is particularly troubling for African countries relying on foreign direct investment (FDI) to finance infrastructure, energy and industrialisation agendas.
How the global south can respond
In response to these mounting challenges, countries across Africa and the global south must adopt both short- and long-term strategies to strengthen economic resilience, safeguard growth prospects, and reinforce their role in global trade.
1. Deepen regional trade integration
Africa’s best bulwark against external shocks is regional trade. The African Continental Free Trade Area (AfCFTA) represents a transformative step toward creating a unified market of over 1.4 billion people. By increasing intra-African trade, countries can build scale, diversify markets and reduce dependency on external demand. However, successful implementation of AfCFTA requires more than policy declarations. It needs infrastructure development, regulatory harmonisation and investment in transport and logistics. If fully realised, AfCFTA could drive value addition, support industrial diversification, and provide a stable buffer against global trade fluctuations.
2. Diversify exports and upgrade industry
Many African countries rely on a narrow basket of exports, leaving them highly vulnerable to price shocks and demand volatility. Strategic investment in manufacturing, agro-processing, pharmaceuticals and technology-enabled services can help diversify economies and foster more inclusive growth. Countries like Rwanda and Ghana are already experimenting with digital services, fintech and value-added agriculture. Supporting such innovation through industrial policy, skills development and infrastructure investment can reduce the vulnerability associated with traditional export dependence.
3. Strengthen south-south cooperation
South-south cooperation provides a vital avenue for the global south to chart alternative paths to development. By enhancing trade, investment and technological collaboration with emerging economies in Asia, Latin America and the Middle East, African countries can reduce exposure to Western-led economic disruptions.
Conclusion
The resurgence of US tariffs and the broader tilt toward economic nationalism have injected volatility into an already fragile global economy. While Africa stands to bear significant costs also through secondary effects such as supply chain disruptions, commodity shocks and investment slowdowns. These challenges underscore the urgency of diversifying trade relations, building regional resilience, and harnessing the potential of south-south cooperation. Africa cannot afford to be a passive observer in the evolving global trade order. Instead, it must proactively chart its own course, rooted in economic sovereignty, regional solidarity and strategic global partnerships.
- This article first appeared at LSE Business Review.
- Subscribe to LSE USAPP’s email newsletter to receive a weekly article roundup.
- Featured image provided by Shutterstock.
- Please read our comments policy before commenting.
- Note: This article gives the views of the author, and not the position of USAPP – American Politics and Policy, nor the London School of Economics.