Trade experts suggest that African countries will respond to tariffs involving diplomacy and avoid retaliation to obtain the best trade agreement.
Johannesburg – Msebishi Jonas usually does not suffer from nerves. If he had done so, he would not survive the brutal guerrilla campaign against South Africa’s apartheid plantarists in the 1970s and 1980s.
“As an ANC executive (the then-banned African National Congress), I was fighting for freedom from racism, black voting rights and human rights,” he told The Epoch Times.
“Now I’m trying to fight another, very different battle. I’m a little nervous, but ready to talk to all the representatives of the US President. I believe we treat each other with respect,” said the eloquent former Finance Minister in Pretoria and the now successful businessman.
Jonas is part of the exclusive club of recently created special envoys appointed by most of the 54 African countries, negotiating better export terms and conditions that he hopes to allow goods to be sold for “reasonable profits” in the world’s most profitable market.
This follows the announcement of tariffs on goods exported to the United States by US President Donald Trump on April 2nd by his economic partner. Trump said the obligation would correct the trade imbalances he said were unfair to America.
A week later, Trump suspended the 90-day mutual tariff. This excludes the Chinese people – many countries reach out and show that the US is open to negotiations.
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If nothing changes after the 90-day suspension, some of the highest tariffs of 30% and 50% will be those of products imported from Africa.
The African envoy is currently rushing to meet the July deadline.
On May 28, 2022, we will melt pure gold fragments from various mines in the region at the Gaita gold market in Tanzania. Luis Tato/AFP via Getty Images
“Most African countries export far more African countries than imports from the US, so the Trump administration calculated that trade between regions is unfairly weighted to Africa and that the US is losing,” explained Morne Marin, policy director at the South African Free Market Foundation.
In addition to the trade deficit, Trump also looked for other signs of trade barriers as a standard for imposing tariffs.
Kenya is one example of this, where the US has enjoyed a trade surplus.
That year, Kenya imported goods worth $782.5 million from the United States. It mainly imported petroleum products, aircraft and related parts, machinery and pharmaceuticals, giving the US a trade surplus of $45.2 million.
Nevertheless, President William Root’s government had expected President Trump to strike Kenya with higher tariffs as Nairobi would charge 10% tax on American imports.
So, a team of negotiators were sent to the White House a day before Trump’s “liberation day” tariffs were announced, and the country entered “damage control mode,” the Chief Cabinet Secretary of Trade and Industry said.
The Kenyan government’s main purpose of ensuring tax-free or “very advantageous mandatory access” of goods to the US market remains the subject of the talks, but Trump has collected 10% mutual tariffs in Nairobi.
“We believe it will be very helpful to talk to Trump people before his announcement,” Kinyanjui told the Epoch Times.
“We are considering a free trade agreement with the US. That means discarding tariffs on American goods that enter Kenya. And we still hope to export tax exemptions to the US. That’s reciprocity.”
Stephen Gruzd of the South African Institute of International Affairs described Kenya as “a little bit of anomaly.”
“I’m not a fan of the African government that steals the resources of their country and makes people poor, but I have to agree that it’s a bit stretchy to expect a nation with GDP, small budgets and huge debts and low manufacturing bases to import large, expensive goods, products and services from the wealthy economies of the world,” he told the Epoch era.
In this context, African envoys visit the White House.
“He’s about to enter a lion’s den,” Maran said of South African diplomat Jonas.
Artisan miners collect gravel from the Luxi River in search of Cassitelite in Manono, DRC on February 17, 2022 Junior Kanna/AFP via Getty Images
The US 31% tariff on South Africa was on the list of 60 countries that Trump said he had traded unfairly with his country during the April 2 announcement, but the president’s latest salvo against the president’s latest presidential economy.
In one of his first executive orders, the US leader accused Pretoria of implementing racist laws aimed at discriminating and encouraging violence against white Africans.
Trump then retracted $440 million in annual funding to South Africa, resulting in slowing the country’s HIV treatment and prevention programme.
He said South Africa is a threat to US national security as the ANC government has military and economic alliances with Washington’s major geopolitical enemies, including China, Iran and Russia.
Secretary of State Marco Rubio then expelled Washington’s South African ambassador, Ebrahim Lasor of the ANC, to Washington, after Trump once again made America great and considered his administration a “superficialist.”
Jonas frowned, “Yes, the recent history between South Africa and the US is not good.
“However, we are confident that we can work together in the future and reach a mutually beneficial agreement that will promote the flow of American goods to our country.
“It has been revealed that Pretoria has been deemed an enemy and has given (President Cyril) the Ramaphosa government the same position as Beijing, Moscow and Tehran,” said Stephen Gurus of the South African Institute of International Affairs, in communications within the Trump administration.
Like many people in Africa, Pretoria has “good cards to trade” to persuade the US president, Gruzd said. The cards are key elements of precious metals such as gold and platinum, as well as weapons and military equipment, making them shine the charm of the continent’s vast resources, including important minerals essential for energy security and defense.
South Africa already supplies almost all of America’s chromium, offering a quarter of the manganese requirements.
Chrome is prominently characterized by the production of weapons, such as missile systems and fighter jets.
Other minerals produced on a large scale by African countries include lithium, used in batteries in electric vehicles, and cortan, used in communication devices such as mobile phones and computers.
While Trump exempts critical minerals from tariffs, Guruzd said South Africa’s mineral wealth still plays a role in the possibility of lowering US taxes in South Africa, given the Trump administration’s wish to reduce China’s dependence on supplies.
“China controls the mineral sector in Africa, with mines everywhere, from the DRC (DRC) to Zambia and Guinea,” Guruzd said.
“Beijing has put the US very disadvantage in terms of harvesting and treating continental minerals and metals, ensuring that these important items have a reliable supply for the future.
Gruzd said if the US and South Africa can enter into a critical mineral contract, “it would be a huge political and economic victory for the Trump administration.”
“If Trump is offered mining rights in certain African countries, this will go a long way in persuading him.
CSIS said Trump should cancel tariffs in African countries and that the African Union and African leaders should “try to demonstrate priority trade with the continent.”
“Just Canada and Mexico have been exempt from mutual tariffs in the US national interests, we can create similar cases for Africa in terms of market access and security of key mineral supply chains,” wrote economic development experts Hannah Rider, Trevor Leware and Obigue Egegu.
“It is not in the US interest to impose tariffs on African goods as tariffs are set to be attacked by US companies in the automotive, aerospace and chemical sectors that rely heavily on the important minerals that Africa has.”
Ryder, Lwere and Eguegu stress that one of the Trump administration’s objectives is to increase market access for American companies and products overseas.
“This requires the presence of purchasing power among foreign consumers. By imposing tariffs on Africa’s exports to the US, it makes it difficult for the US to obtain the purchasing power it needs to demand our products,” they said.
Experts said the US should support priority access to African products to the US market as a market building strategy.
This is important, they write, especially considering that Africa has the youngest population and that over 25% of the world’s population will live in the coming decades.
Bamidele Ayemibo, lead trade policy consultant at 3T Impex Consulting Limited in Nigeria, said the African government’s response to Trump’s tariffs is to sign a priority trade agreement with the US and other partners.
“The last thing they should do is retaliate with higher tariffs on US products. They don’t have the financial strength to do so, so they just hurt themselves,” he told the Epoch Times.
“Now, more than ever, it’s time to talk.
