US–China tariff war: Its implications for Africa and global trade

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OPINION

By Arthur Atuha

The ongoing US-China tariff war has sent ripples across the global economy, and Africa finds itself in a unique position both as a potential beneficiary and a vulnerable player in this high-stakes economic confrontation. Since 2018, the exchange of tariffs between the world’s two largest economies has disrupted supply chains, redirected trade flows, and forced nations to rethink their economic alliances.

For Africa, the implications are profound. On one hand, the continent stands to gain from redirected investments, new export opportunities, and increased geopolitical leverage. On the other hand, it risks deepening dependency, environmental degradation, and exploitative trade imbalances if it fails to navigate this rivalry strategically. The recent restrictions have also extended to rare earth minerals, particularly those imposed by China and countered by the US and EU to mark a critical escalation in the global race for resource security.

One of the most immediate opportunities for Africa lies in manufacturing and export diversification. With US tariffs on Chinese goods like textiles and electronics reaching up to 145%, global buyers are turning to alternative suppliers, and African nations are stepping in to fill the gap. Ethiopia’s Hawassa Industrial Park, for instance, has become a hub for garment production, supplying major brands like H&M and Calvin Klein while creating tens of thousands of jobs.

Similarly, South Africa’s automotive sector has benefited as manufacturers shift some production away from China to avoid tariffs, particularly in components like catalytic converters that rely on the country’s platinum reserves. Meanwhile extension of emerging markets seems potentially viable for agriculture; however, geopolitically, the tariff war has turned Africa into a battleground for influence.

The escalating restrictions on rare earth minerals, on the other hand, spearheaded by China and met with countermeasures from the US, reveal a troubling paradox in the global push for sustainability and technological supremacy. While these policies aim to secure supply chains and reduce dependence on geopolitical rivals, they risk reinforcing the very inequalities they claim to address.

China’s recent export controls on critical minerals like gallium and germanium, a direct response to Western technology sanctions, underscore its stranglehold on the market, controlling 80-90% of global supply. This move has sent shockwaves through industries reliant on these materials, from electric vehicles to renewable energy, forcing nations to scramble for alternatives. For Africa, which holds vast untapped reserves of rare earths, ranging between 30-40% of the global rare earth minerals, but only contributes less than 5% of production, it could be a golden opportunity, but only if the continent avoids the pitfalls of its past.

The earlier Africa takes advantage of the trade diversions caused by the tariffs, the easier it would be to increase its market share globally; however, the ongoing negotiations seem to be robbing Africa of its potential this early, as the results remain uncertain. Nonetheless, optimism would suggest an eco-ground negotiation as achieving an arms-length outcome is merely a dream. 

Africa’s potential as a rare earth supplier is immense, with countries like the DRC, South Africa, and Malawi sitting on deposits that could rival China’s dominance. The sudden Western interest in African minerals, framed as a solution to "de-risking" supply chains. This could feel like reminiscent of colonial-era resource extraction.

The US and EU, while touting partnerships, often prioritise their own security over Africa’s development, offering limited investment in local processing or value-added industries. Meanwhile, China’s Belt and Road Initiative, though it could seem exploitative in its own right, at least builds infrastructure, albeit with strings attached. The danger for Africa lies in becoming a pawn in this great-power game, exporting raw materials while others reap the profits of advanced manufacturing.

The tariff war presents Africa with more opportunities; however, these seem to come with significant risks. Africa’s growing reliance on Chinese investment, particularly in infrastructure and mining, has raised concerns about debt sustainability and loss of economic sovereignty.

Kenya’s struggle with Chinese-financed debt, including the controversial use of Mombasa Port as collateral, serves as a cautionary tale. Similarly, the Democratic Republic of Congo (DRC), which supplies 70% of the world’s cobalt, remains trapped in a cycle of resource extraction without capturing the full value of its minerals. Chinese companies dominate the country’s mining sector, often at the expense of environmental and labour standards. At the same time, U.S. policies like the African Growth and Opportunity Act (AGOA), which grants tariff-free access to American markets, remain vulnerable to political shifts, leaving African exporters in a precarious position.

To navigate these challenges, African nations must adopt a proactive approach. Policies that promote local value addition, such as banning raw mineral exports and investing in processing facilities, could help countries like the DRC move up the supply chain. Strengthening regional trade through the African Continental Free Trade Area (AfCFTA) would reduce reliance on external markets, while stricter regulations on foreign investment could ensure that BRI projects meet environmental and social standards.

Ultimately, the rare earth restrictions are a wake-up call. The continent’s minerals should fuel its own industrial rise and not just the West’s energy transition or China’s geopolitical ambitions. Without bold action, Africa risks repeating history, trading one form of dependency for another. The choice is clear: leverage this moment for true economic transformation, or remain a footnote in someone else’s resource war.

The writer is a research fellow at the Development Watch Centre