Trump's Tariffs Spark a Global Economic Big Bang
By comprehending how President Trump's impact is molding occurrences throughout Western, Asian, Middle Eastern (Arab), and African territories, we can gain deeper insights into what I term "the Trump Effect," drawing parallels with the concept of the Big Bang. This may foster a fairer viewpoint and pave the way for discussions instead of engaging in an eye-for-an-eye trade conflict.
An undeniable truth is that Trump is rewriting the global trade rules, achieving this by stifling globalization—an occurrence that commenced from the latter part of the 18th century through the early 19th century. Historically speaking, events such as the Silk Road and the Industrial Revolution—the latter beginning in Great Britain after the advent of the steam engine and mechanized weaving—initiated worldwide commerce by facilitating large-scale manufacturing aimed at consumers far beyond local markets.
In today’s world, global commerce experienced substantial growth following the founding of the World Economic Forum (WEF) in 1971 in Davos, Switzerland. From that point onward, global trade has adhered to principles outlined in the Davos Manifesto, advocating for moral business practices, accountable leadership, and the impartial tenets of Swiss diplomatic ethos—a foundation supporting the concept of globalization. This framework was officially documented in 1973 and later updated in 2020.
History demonstrates that global trade prospers under protection but stumbles without it. For example, the exchange of silk and spices between China and Rome prospered in the first century BCE thanks to support from strong empires. However, as these empires weakened, the trade routes and their economic success diminished accordingly.
Currently, as President Donald Trump—the head of the present world superpower—adopts a protectionist position, this aligns with his previous actions. Throughout his career, he has frequently employed tariffs as a means of exerting economic influence. As far back as 1988, during an appearance on Oprah Winfrey’s show, Trump—who was at that time primarily known as a real estate developer—criticized China for allegedly taking advantage of the U.S. economy.
Trump is not the only one taking such a stance. An old video from 1996 has emerged showing Nancy Pelosi, who was then a congresswoman representing California, speaking out against a proposal granting China special trading privileges. She spoke against offering tariff breaks for goods coming from China—a position that aligns with what Trump advocates today.
To sum up, employing tariffs as a strategic instrument in international trade originated from both Republican and Democratic support in the U.S. The key difference lies in the magnitude and boldness of the Trump administration’s tactics, causing tremors throughout the worldwide economy—a move dubbed a pivotal "Big Bang" event in the annals of trade history.
Therefore, Trump is essentially mirroring Pelosi's views by currently implementing substantial tariffs. The key distinction lies in the scope: these increased duties aren’t confined to just China but have also been applied to approximately 180 countries worldwide, impacting around 60 nations considerably.
Interestingly enough, reports indicate that back in 2019, Vermont Senator Bernie Sanders proposed using tariffs as a means to protect against unfair trading tactics. This idea is now being used as the foundation for Trump’s current worldwide tariff conflict, putting the globe on high alert.
Specialists knowledgeable about the historical background and present usage of tariffs disclose that approximately $400 billion worth of American products faced tariffs during Trump’s initial term. For his ongoing second tenure, estimates indicate that as much as $1 trillion worth of merchandise could be subjected to U.S. trade tariffs.
Based on economist projections, around $3.3 billion worth of goods are imported into the United States each year.
President Trump believes that his policy of imposing higher tariffs will lead to greater prosperity for the United States by fostering domestic manufacturing. This increase in local production is expected to enhance job opportunities for American workers from blue-collar backgrounds. Additionally, one of his main goals is to establish equitable trade practices with the country’s international trade partners, who he claims have been gaining unfair advantages over the U.S.
In the end, President Trump intends to utilize the funds generated from these elevated tariffs to contribute towards narrowing the $36 trillion budget gap confronting the globe's biggest and strongest economic powerhouse.
Given these circumstances, Mr. Peter Navarro, an advisor to President Trump on trade matters, argues that substantial tariffs could yield more than $6 trillion for the United States in the near future.
In all of this, my main concern and interest is in how Africa can benefit from the reimagining of the global socioeconomic ecosystem, as President Trump upends the old world order.
Given the new 14% duty levied by the United States on products from Nigeria, along with a 10% tariff affecting most countries across the 54-nation African continent, Nigeria faces significant challenges. The country's exports to America, which amounted to roughly $5 to $6 billion annually—with more than 90% coming from oil and gas, and less than 10% derived from non-oil and gas sectors—are now jeopardized.
Even within non-oil/gas exports, the majority consists of raw materials like urea/fertilizers, ammonia, floral products, and cashews, accounting for approximately 8%.
It is disheartening that value-added or processed exports from Nigeria to the U.S. amount to just 2%, which is extremely low.
Even though these numbers are modest, the introduction of a 14% duty on Nigerian products – even with the trade surplus being advantageous towards the U.S. – should act as an alarm for Nigeria and the entire African continent to start enhancing the value of their exported items. For non-oil exports, which face a 10% tariff, to remain competitive within the American market, they will have to advance along the value chain.
Nigeria's exports continue to be dominated by raw materials, highlighting the nation's persistent position as a provider of these resources to developed countries across Europe, North America, and Asia. Of all six continents, only South America and the Arab world haven’t completely tapped into Africa as both a source for raw materials and a market for their finished goods. Consequently, Africa has often been seen as an unfortunate victim, grasping at the wrong end of things. It needs to undertake deliberate actions with clear strategies to shift this unfavorable storyline.
When I think about the Trump tariffs, they bring to mind deglobalization as international trade and investments among nations start declining. However, this worldwide tariff conflict presents an opportunity for Africa to redefine itself globally through unified action. This involves determining which African countries should engage in commerce within the Global South, West, or East under their own conditions rather than adhering to frameworks established during the Berlin Conference—when Africa wasn’t represented and its resources were divided up like war prizes among European powers who transitioned from being slavers to colonizers exploiting the continent’s wealth.
• Magnus Onyibe, an entrepreneur, public policy analyst, author, advocate for democracy, and development strategist who graduated from the Fletcher School of Law and Diplomacy at Tufts University in Massachusetts, USA, and previously served as a commissioner in the Delta State government, submitted this article from Lagos, Nigeria.
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