April 3, 2025 • 12 mins
President Trump imposed the steepest American tariffs in a century as he steps up his campaign to reshape the global economy. Many African countries have been hit with the so-called reciprocal tariffs including a 31% levy on South Africa and 50% on Lesotho.
Bloomberg Economics Africa Economist Yvonne Mhango joins Jennifer Zabasajja to explain what the impacts of these tariffs will be on African Economies - and what the global trade war could mean for hopes of growth.
For more stories from the region, subscribe to the Next Africa newsletter here
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
President Trump has imposed sweeping tariffs on countries across the
African continent on a day that saw America impose its
steepest tariffs in a century.
Speaker 3 (00:19):
Our nations will finally be asked to pay for the
privilege of access to our market, the biggest market in
the world.
Speaker 2 (00:26):
All corners of Africa have been hit, including a fifty
percent terra for Lisutu and fourteen percent for Nigeria. In
announcing a thirty percent levee for South Africa, the President
again referred to unfounded conspiracy theories.
Speaker 3 (00:40):
Then they've got some bad things going on in South Africa.
You know we're paying them billions of dollars a week.
Cut the funding because a lot of bad things are
happening in South Africa. The fake news are to be
looking at it. They don't want to report it.
Speaker 2 (00:53):
On this week's Next Africa Podcast, we look at what
this global trade war will mean for the continent and
what the fall out will be for economies as the
world faces up to a revolution in global trade. I'm
Jennifer's Abazanja and this is the Next Africa Podcast, bringing
you one story each week from the continent, driving the
(01:14):
future of global growth with the context only Bloomberg can provide.
Joining me to discuss this breaking news is Bloomberg Economics
Africa Economists, that is Yvonne Mango Ivon. Thanks again for
joining us back on the podcast. This is a fast
moving story. Just break down the latest for US and
what we know about how African countries are going to
(01:38):
be affected by these tariffs that Trump just announced.
Speaker 1 (01:41):
Well, if we look across the fifty countries on the continent,
there seems to be one criteria by which they used
in order to impose the TERFs. And this is not
just for Africa, it's global. So for any country that
the US had a trade deficit with, regardless of the
size of it, whether it's in millions or billions or dollars,
they've been posed tariffs that are higher than ten percent.
(02:03):
For countries that the US has trade surpluses with, it's
been that flat baseline tariff of ten percent. So in
the case of South Africa, which last year exported fourteen
billion dollars worth of goods to the US, South Africa
I enjoyed a trade surplus with the US, which implied
the trade deficit for the American market. As you saw,
(02:25):
it was imposed of a significantly higher tariff than the
baseline of around thirty percent. And that's similar for other
African countries that also have trade surpluses with the United States.
Speaker 2 (02:39):
And we of course heard President Trump singling out in
particular South Africa as he has previously. Do we know
yet what the impact of these tariffs are going to be,
especially when you take a look at some of these
smaller I mean it's relative, but smaller countries that have,
you know, their own resources that they've exported. What could
(03:01):
we see the impact being economically?
Speaker 1 (03:04):
So we don't know, but we can sort of get
an idea or these speculate in terms of what the
impact could be. So I'll pick Klasuti for instance, a
small mountain kingdom that sits within South Africa's borders. They've
been hit with the large tariff of fifty percent. That's
pretty surprising given that it's a very small economy with
exports to the US that are only in the millions
(03:26):
of dollars, so it's not even a threat to the
United States. But they've been hit this big tariffs. What
does listened to export? It exports apparel, which is garments
essentially and diamonds. Now, what's unfortunate about the imposition of
this high tariff on Lisutu is the export industry was
actually something that was promoted by US policy. As you know, Lsutu,
(03:50):
like several African countries, enjoyed duty free access to the
US market under a GOA that's after and Growth and
Opportunity Act. And part of that or the reasoning behind
the US promoting such a policy was to help countries
develop using exports or export driven growth. And that's that's
(04:10):
exactly what Lissutu did and created this apparol industry. And
now they're being penalized for doing so well at developing
this industry to the point where they had a small
trade surplus of the United States, and now they've been
slapped fifty percent tariff. Now the question is, so what
happens to those garments. So the alternative, I guess, would
be for Lisutu to try and find an alternative market.
(04:31):
That of course cannot happen overnight. Some businesses may not
be able to do it soon enough in order to
keep their businesses open essentially, and that's the one challenge.
The other issue which we find prely odd is that
in the SUITUS case, half of their exports are diamonds.
That's war materials. And actually, if you look at several
of the African countries that have trade surplus, is the
(04:51):
US they're exporting war materials. And if you look at
the reasoning behind Trump's tariff policy, part of it is
to bring manifes actually jobs back to the United States.
Slapping these high times and often countries is not going
to you know, it doesn't fit that narrative because a
lot of those exports were raw materials. Number one, it
(05:12):
doesn't fit that narrative. And number two, it implies that
Africa is going to have to source alternative markets for
their raw materials. But the third point I'm probably going
to make is what we're likely going to see over
the next weeks to come is a lot of those
countries pursuing bilateral trade agreements with the United States to
try and get concessions because it will be very difficult
(05:34):
for several countries to find alternative markets for their exports.
Speaker 2 (05:39):
And we've heard some countries actually talk about some of
these potential bilateral agreements, especially as a GOA. The expiration
of a GOA comes close to an end at the
end of this year. I wonder, from your perspective, does
this all but mean that a GOA is done and
done in the water.
Speaker 1 (05:58):
I think the short answer to your question is yes,
the cuprocal tarff supersedes a GOA. That's all understanding, and
they'll be imposed as soon as I think it's the
ninth of April. So everyone is working with these tariffs
as we speak, and this is the basis of any
negotiations that countries want, but it won't be a multilateral
trade agreement as it was previously. Countries are going to
(06:18):
have to pursue bilateral agreements to try and get concessions.
But I don't think we're going to go back to
the days whereby the countries that are a party to
this a GOA act are going to get the same
duty free access that got previously. I think those days
are gone. I think the best you can hope for
is ten percent. What is the baseline that the US
is imposing.
Speaker 2 (06:37):
Stick with us VON When we come back, we'll talk
more about what the fallout from this global trade war
could mean for the continent. We'll be right back. Welcome
back today on the podcast we're looking into President frum
sweeping tariffs that are having repercussions across the world. Bloomberg
(07:00):
Economics African economists Ivon Mango is with us this week. Ivon,
we have seen a global market sell off as these
cariffs are having a worldwide impact. When we think about
African economies, we think about the raw materials that you
were just mentioning that are critical for many of these economies,
and of course a number of volatile currencies within these economies.
(07:21):
What's the effect going to be?
Speaker 1 (07:23):
So let's speak to South Africa in terms of the
goods that or the products that enjoyed a GOA access.
That was mainly the automotive industry, as well as the
citrus industry, which is part of our flourishing agriculture industry.
A lot of companies in those particular industries targeted themselves
to the United States market, so you can imagine at
this point in time and time they'll be floundering. The
(07:47):
option is to try and diversify your markets, which I
think we're already seeing in the agriculture industry, particularly to Asia.
I think one new market opened recently, which is the Philippines.
For South Africa so there is this push forward diversification,
but on the automotive side. In terms of alternatives, you've
got the EU as well. But as I mentioned earlier,
it takes time to make those agreements and for that
(08:09):
to take place. And also keep in mind these tariffs
are global, so the h country is bearing the impact
of these tariffs, and particular, if your export industry takes
a knock, it does have implications for growth. So we're
expecting a slow down in growth from many of the
major economies, which are also sizeable markets for African countries.
(08:31):
So while yes, the ideal thing will be to look
for alternative market, those markets themselves will also be floundering
because demand on their side will slow down and that
has implications for our capacity to find markets for our.
Speaker 2 (08:45):
Exports certainly, and one of those could very directly be China,
right correct, What could that spill over? And again we
know it is still very early China direct line of
fire to a certain extent of these tariffs. What could
that spill over mean for the continent.
Speaker 1 (09:03):
So the main product that China consumes from Africa are
raw material so it's your crude oil and minerals such
as copper. In some instances, particularly comes to critical minerals.
There's still this race between the US and China for
those particular minerals. So I'd imagine countries that have critical
minerals will still be in a position to get concessions
(09:25):
from the United States given that there's this race for
those minerals. So that's what we anticipate, at least for
the exporters of critical minerals, which includes the like of
the Democratic Republic of Congo, Zambia and also South Africa.
That's what we anticipate in terms of the other raw materials,
including coude. So we have seen exporters of cood also
(09:46):
being slapped to high tariffs, such as Algeria simply because
they have a trade surplace of the US. Once again,
you know, it's easy enough to find an alternative market
if demand is strong globally. What will probably have and
is this could impact pricing. So while you may be
able to divert your product to other markets, you could
(10:06):
see commodity prices or some commodity prices come under downward
pressure given the slowdown we're expecting global growth as a
result of trade wars.
Speaker 2 (10:17):
And so VN. Just finally, what are you looking at next?
What is what's your focus? I mean, many of these
countries are still waking up to the reality that this
is setting in. Should we be paying attention to commodity prices,
should we be paying attention to currencies or you know what,
what do you think will really dictate sort of the
direction of travel here for these economies.
Speaker 1 (10:38):
That's a good question. So right now we're trying to
look at what it means for GDP growth in these countries.
So for countries that are exposed in a big way
to export to the US export markets such as I'll
give an example of Madagascar which has been also been
slapped with a high tier for over forty percent, and
that's for exporting vanilla to the United States and their
biggest export market is States. So in countries to which
(11:01):
I heavily expose the US, we are expecting a slowdown
that's more significant than other economies. So I think that's
the big thing we're trying to determine which countries will
be hit harder on the growth front compared to others.
You mentioned currency is very important points if you're not
able to get into your export markets or sell as
many exports, it needs not generating as much foreign exchange
(11:22):
as you used to. That's particularly important for countries that
run current account deficits like South Africa, like Kenya, and
that has implications for the currency. We've already seen the
rand move weaker on the back of the announcement of
the tariffs. That's just inn anticipation of what it could
mean for our external position. But in terms of actually
seeing what the real implications are, only time will tell,
(11:45):
and at this stage it is negative for our currencies.
Speaker 2 (11:49):
It's a fast moving story. I always appreciate your insights, Vonne,
really appreciate you joining us today, and hopefully we'll be
able to make sense of this at a certain point
in time. I don't know that. And thanks again so
much to our Bloomberg Economics Africa economist Ivonne Mango for
joining us this week. And you can read all of
our coverage on the US tariffs across Bloomberg platforms now,
(12:12):
including the Next Africa newsletter. We'll put a link to
that in the show notes. This program was produced by
Adrian Bradley. Don't forget to follow and review this show
wherever you usually get your podcasts. I'm Jennifer's Abisoga. Thanks
as always for listening. We'll see you next week.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
President Trump has imposed sweeping tariffs on countries across the
African continent on a day that saw America impose its
steepest tariffs in a century.
Speaker 3 (00:19):
Our nations will finally be asked to pay for the
privilege of access to our market, the biggest market in
the world.
Speaker 2 (00:26):
All corners of Africa have been hit, including a fifty
percent terra for Lisutu and fourteen percent for Nigeria. In
announcing a thirty percent levee for South Africa, the President
again referred to unfounded conspiracy theories.
Speaker 3 (00:40):
Then they've got some bad things going on in South Africa.
You know we're paying them billions of dollars a week.
Cut the funding because a lot of bad things are
happening in South Africa. The fake news are to be
looking at it. They don't want to report it.
Speaker 2 (00:53):
On this week's Next Africa Podcast, we look at what
this global trade war will mean for the continent and
what the fall out will be for economies as the
world faces up to a revolution in global trade. I'm
Jennifer's Abazanja and this is the Next Africa Podcast, bringing
you one story each week from the continent, driving the
(01:14):
future of global growth with the context only Bloomberg can provide.
Joining me to discuss this breaking news is Bloomberg Economics
Africa Economists, that is Yvonne Mango Ivon. Thanks again for
joining us back on the podcast. This is a fast
moving story. Just break down the latest for US and
what we know about how African countries are going to
(01:38):
be affected by these tariffs that Trump just announced.
Speaker 1 (01:41):
Well, if we look across the fifty countries on the continent,
there seems to be one criteria by which they used
in order to impose the TERFs. And this is not
just for Africa, it's global. So for any country that
the US had a trade deficit with, regardless of the
size of it, whether it's in millions or billions or dollars,
they've been posed tariffs that are higher than ten percent.
(02:03):
For countries that the US has trade surpluses with, it's
been that flat baseline tariff of ten percent. So in
the case of South Africa, which last year exported fourteen
billion dollars worth of goods to the US, South Africa
I enjoyed a trade surplus with the US, which implied
the trade deficit for the American market. As you saw,
(02:25):
it was imposed of a significantly higher tariff than the
baseline of around thirty percent. And that's similar for other
African countries that also have trade surpluses with the United States.
Speaker 2 (02:39):
And we of course heard President Trump singling out in
particular South Africa as he has previously. Do we know
yet what the impact of these tariffs are going to be,
especially when you take a look at some of these
smaller I mean it's relative, but smaller countries that have,
you know, their own resources that they've exported. What could
(03:01):
we see the impact being economically?
Speaker 1 (03:04):
So we don't know, but we can sort of get
an idea or these speculate in terms of what the
impact could be. So I'll pick Klasuti for instance, a
small mountain kingdom that sits within South Africa's borders. They've
been hit with the large tariff of fifty percent. That's
pretty surprising given that it's a very small economy with
exports to the US that are only in the millions
(03:26):
of dollars, so it's not even a threat to the
United States. But they've been hit this big tariffs. What
does listened to export? It exports apparel, which is garments
essentially and diamonds. Now, what's unfortunate about the imposition of
this high tariff on Lisutu is the export industry was
actually something that was promoted by US policy. As you know, Lsutu,
(03:50):
like several African countries, enjoyed duty free access to the
US market under a GOA that's after and Growth and
Opportunity Act. And part of that or the reasoning behind
the US promoting such a policy was to help countries
develop using exports or export driven growth. And that's that's
(04:10):
exactly what Lissutu did and created this apparol industry. And
now they're being penalized for doing so well at developing
this industry to the point where they had a small
trade surplus of the United States, and now they've been
slapped fifty percent tariff. Now the question is, so what
happens to those garments. So the alternative, I guess, would
be for Lisutu to try and find an alternative market.
(04:31):
That of course cannot happen overnight. Some businesses may not
be able to do it soon enough in order to
keep their businesses open essentially, and that's the one challenge.
The other issue which we find prely odd is that
in the SUITUS case, half of their exports are diamonds.
That's war materials. And actually, if you look at several
of the African countries that have trade surplus, is the
(04:51):
US they're exporting war materials. And if you look at
the reasoning behind Trump's tariff policy, part of it is
to bring manifes actually jobs back to the United States.
Slapping these high times and often countries is not going
to you know, it doesn't fit that narrative because a
lot of those exports were raw materials. Number one, it
(05:12):
doesn't fit that narrative. And number two, it implies that
Africa is going to have to source alternative markets for
their raw materials. But the third point I'm probably going
to make is what we're likely going to see over
the next weeks to come is a lot of those
countries pursuing bilateral trade agreements with the United States to
try and get concessions because it will be very difficult
(05:34):
for several countries to find alternative markets for their exports.
Speaker 2 (05:39):
And we've heard some countries actually talk about some of
these potential bilateral agreements, especially as a GOA. The expiration
of a GOA comes close to an end at the
end of this year. I wonder, from your perspective, does
this all but mean that a GOA is done and
done in the water.
Speaker 1 (05:58):
I think the short answer to your question is yes,
the cuprocal tarff supersedes a GOA. That's all understanding, and
they'll be imposed as soon as I think it's the
ninth of April. So everyone is working with these tariffs
as we speak, and this is the basis of any
negotiations that countries want, but it won't be a multilateral
trade agreement as it was previously. Countries are going to
(06:18):
have to pursue bilateral agreements to try and get concessions.
But I don't think we're going to go back to
the days whereby the countries that are a party to
this a GOA act are going to get the same
duty free access that got previously. I think those days
are gone. I think the best you can hope for
is ten percent. What is the baseline that the US
is imposing.
Speaker 2 (06:37):
Stick with us VON When we come back, we'll talk
more about what the fallout from this global trade war
could mean for the continent. We'll be right back. Welcome
back today on the podcast we're looking into President frum
sweeping tariffs that are having repercussions across the world. Bloomberg
(07:00):
Economics African economists Ivon Mango is with us this week. Ivon,
we have seen a global market sell off as these
cariffs are having a worldwide impact. When we think about
African economies, we think about the raw materials that you
were just mentioning that are critical for many of these economies,
and of course a number of volatile currencies within these economies.
(07:21):
What's the effect going to be?
Speaker 1 (07:23):
So let's speak to South Africa in terms of the
goods that or the products that enjoyed a GOA access.
That was mainly the automotive industry, as well as the
citrus industry, which is part of our flourishing agriculture industry.
A lot of companies in those particular industries targeted themselves
to the United States market, so you can imagine at
this point in time and time they'll be floundering. The
(07:47):
option is to try and diversify your markets, which I
think we're already seeing in the agriculture industry, particularly to Asia.
I think one new market opened recently, which is the Philippines.
For South Africa so there is this push forward diversification,
but on the automotive side. In terms of alternatives, you've
got the EU as well. But as I mentioned earlier,
it takes time to make those agreements and for that
(08:09):
to take place. And also keep in mind these tariffs
are global, so the h country is bearing the impact
of these tariffs, and particular, if your export industry takes
a knock, it does have implications for growth. So we're
expecting a slow down in growth from many of the
major economies, which are also sizeable markets for African countries.
(08:31):
So while yes, the ideal thing will be to look
for alternative market, those markets themselves will also be floundering
because demand on their side will slow down and that
has implications for our capacity to find markets for our.
Speaker 2 (08:45):
Exports certainly, and one of those could very directly be China,
right correct, What could that spill over? And again we
know it is still very early China direct line of
fire to a certain extent of these tariffs. What could
that spill over mean for the continent.
Speaker 1 (09:03):
So the main product that China consumes from Africa are
raw material so it's your crude oil and minerals such
as copper. In some instances, particularly comes to critical minerals.
There's still this race between the US and China for
those particular minerals. So I'd imagine countries that have critical
minerals will still be in a position to get concessions
(09:25):
from the United States given that there's this race for
those minerals. So that's what we anticipate, at least for
the exporters of critical minerals, which includes the like of
the Democratic Republic of Congo, Zambia and also South Africa.
That's what we anticipate in terms of the other raw materials,
including coude. So we have seen exporters of cood also
(09:46):
being slapped to high tariffs, such as Algeria simply because
they have a trade surplace of the US. Once again,
you know, it's easy enough to find an alternative market
if demand is strong globally. What will probably have and
is this could impact pricing. So while you may be
able to divert your product to other markets, you could
(10:06):
see commodity prices or some commodity prices come under downward
pressure given the slowdown we're expecting global growth as a
result of trade wars.
Speaker 2 (10:17):
And so VN. Just finally, what are you looking at next?
What is what's your focus? I mean, many of these
countries are still waking up to the reality that this
is setting in. Should we be paying attention to commodity prices,
should we be paying attention to currencies or you know what,
what do you think will really dictate sort of the
direction of travel here for these economies.
Speaker 1 (10:38):
That's a good question. So right now we're trying to
look at what it means for GDP growth in these countries.
So for countries that are exposed in a big way
to export to the US export markets such as I'll
give an example of Madagascar which has been also been
slapped with a high tier for over forty percent, and
that's for exporting vanilla to the United States and their
biggest export market is States. So in countries to which
(11:01):
I heavily expose the US, we are expecting a slowdown
that's more significant than other economies. So I think that's
the big thing we're trying to determine which countries will
be hit harder on the growth front compared to others.
You mentioned currency is very important points if you're not
able to get into your export markets or sell as
many exports, it needs not generating as much foreign exchange
(11:22):
as you used to. That's particularly important for countries that
run current account deficits like South Africa, like Kenya, and
that has implications for the currency. We've already seen the
rand move weaker on the back of the announcement of
the tariffs. That's just inn anticipation of what it could
mean for our external position. But in terms of actually
seeing what the real implications are, only time will tell,
(11:45):
and at this stage it is negative for our currencies.
Speaker 2 (11:49):
It's a fast moving story. I always appreciate your insights, Vonne,
really appreciate you joining us today, and hopefully we'll be
able to make sense of this at a certain point
in time. I don't know that. And thanks again so
much to our Bloomberg Economics Africa economist Ivonne Mango for
joining us this week. And you can read all of
our coverage on the US tariffs across Bloomberg platforms now,
(12:12):
including the Next Africa newsletter. We'll put a link to
that in the show notes. This program was produced by
Adrian Bradley. Don't forget to follow and review this show
wherever you usually get your podcasts. I'm Jennifer's Abisoga. Thanks
as always for listening. We'll see you next week.
Host
Jennifer Zabasajja
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!