Punitive levies prompt African push for diversification

After US President Donald Trump's announcement of a sweeping new tariff policy on Wednesday, African leaders and officials have warned that the move will severely affect the continent's exports to the United States.

They called for a strategic response that includes boosting intra-African trade, diversifying export markets and engaging in negotiations to correct the punitive tariffs.

South African President Cyril Ramaphosa voiced deep concern over the decision, which includes a 30 percent import tariff on his country's goods.

In a statement on Thursday, Ramaphosa said the tariffs underscore the urgent need to negotiate a new, mutually beneficial bilateral trade agreement with the US to ensure long-term trade certainty.

"While South Africa remains committed to a mutually beneficial trade relationship with the US, unilaterally imposed and punitive tariffs are a concern and serve as a barrier to trade and shared prosperity."

Under the new policy, Trump's executive order introduces a tiered tariff system. A universal baseline tariff of 10 percent applies to all imports, but countries identified with larger trade deficits with the US faces higher duties.

Lee Kinyanjui, Kenya's Cabinet secretary for investments, trade and industry, said on Thursday that the major challenge posed by the US' "reciprocal tariff" is the increased cost burden on Kenyan exports.

While Kenya is subject to the baseline 10 percent tariff, lower than what some competitors face, it still raises costs for Kenyan businesses exporting to the US, he said.

"Supply chain adjustments will be necessary, such as expanding production to meet new demand. This will require investment in infrastructure, technology and skills development."

He highlighted the need to explore alternative markets in Asia and Europe and increase intra-African trade. "There is a great opportunity to diversify exports beyond our current exports," he said.

In addition, experts argued that the new tariffs could spell doom for the African Growth and Opportunity Act, a trade initiative signed into law in 2000 by former US president Bill Clinton to expand ties with sub-Saharan African countries.

The act facilitates duty-free access to the US market for products from 35 African countries, and is due to expire in September. Analysts said it will unlikely be renewed under the Trump administration.

Julius Kones, a Kenyan statistician, said that as a continent, Africa should now be preoccupied more on how to survive in the new world economic order.

Uncertainty over the renewal of the African Growth and Opportunity Act is already causing jitters among African countries as the deadline approaches, he said.