The United States’ decision to impose a 10% tariff on all imports marks a pivotal moment in global trade dynamics. While policymakers in Washington may argue that this move protects domestic industries and reduces dependency on foreign goods, the long-term consequences could be far-reaching.
This policy, rather than strengthening U.S. dominance, could signal the beginning of a declining phase in American hegemony and weaken its leadership in the global economic order. At the same time, this shift presents an unprecedented opportunity for the African Continental Free Trade Area (AfCFTA) to emerge as a formidable player in global commerce.
The Declining Phase of American Hegemony
For decades, the U.S. has been the epicentre of the world economy, setting the rules of global trade through multilateral institutions and strategic alliances.
However, the imposition of broad tariffs on imports suggests a shift toward protectionism, a strategy that historically backfires by triggering retaliatory measures, reducing trade efficiency, and eroding diplomatic goodwill. Here’s how this tariff could accelerate America’s decline as the dominant global economic force:
1. Erosion of Free Trade Leadership
The U.S. has long been a champion of free-market capitalism, advocating for global trade liberalization through agreements such as WTO regulations, and bilateral trade deals. A blanket 10% tariff contradicts these very principles, making it harder for the U.S. to argue against protectionist policies in other nations.
Countries that once followed America’s trade model may now look toward alternative economic leadership, particularly from China and the European Union.
2. Strengthening of Economic Rivals
While the U.S. is imposing import taxes, China is expanding its trade footprint through the Belt and Road Initiative (BRI), strengthening ties with Africa, Asia, and Latin America.
The EU is deepening its economic alliances through expanded trade agreements. Meanwhile, BRICS nations (Brazil, Russia, India, China, and South Africa) are actively promoting de-dollarization and alternative financial systems. By isolating itself with protectionist policies, the U.S. risks pushing its trade partners toward rival economic blocs, weakening its global influence.
3. Declining Trust in the U.S. Dollar
One of the pillars of U.S. economic hegemony is the dominance of the U.S. dollar (USD) as the world’s reserve currency. This dominance is maintained through global trade reliance on the USD for transactions and foreign exchange reserves.
However, if countries begin diversifying their trade away from the U.S. due to these tariffs, they may seek alternative settlement mechanisms in Chinese yuan, euros, or regional currencies, further reducing reliance on the USD and diminishing American financial power.
4. Global Supply Chain Reconfigurations
American firms that rely on imports for production, ranging from tech companies to automotive manufacturers, will face higher costs, making their products less competitive globally. In contrast, competitors in Asia, Europe, and Africa could step in to fill the supply chain void left by weakened American trade relationships.
The AfCFTA: A Blessing in Disguise
As the U.S. retreats into protectionism, Africa has a unique opportunity to strengthen its economic integration through the AfCFTA. Launched in 2021, AfCFTA is the largest free trade area by the number of participating countries, aiming to boost intra-African trade, industrialization, and economic self-sufficiency. Here’s how the U.S. tariff shift could accelerate Africa’s economic rise:
1. Increased Trade Diversification
With reduced U.S. trade appeal, African nations will be incentivized to trade more with one another, strengthening regional supply chains and reducing reliance on external partners. For example, Ghana, which exports cocoa to the U.S., can shift towards processing more cocoa locally and selling finished chocolate products within Africa, capturing greater value.
2. Attraction of Foreign Investment
As the U.S. creates barriers for global commerce, investors seeking new markets with lower trade restrictions may turn to Africa. The AfCFTA provides a 1.4-billion-person market with zero intra-African tariffs, making it an attractive destination for manufacturing, tech, and agriculture-based industries.
For instance, automotive giants like Volkswagen and Toyota are already expanding operations in Ghana, Rwanda, and South Africa to serve the African market rather than relying on Western exports.
3. Strengthening Africa’s Industrial Base
Africa has historically been an exporter of raw materials rather than finished goods. However, with reduced Western trade dominance, African countries have the chance to scale up local production.
Nations like Nigeria, Egypt, and South Africa are investing in textiles, pharmaceuticals, and automotive industries, allowing them to become suppliers of finished goods to their neighbours instead of depending on imports from the U.S. or Europe.
4. Empowering African Currencies
If African nations increase intra-continental trade under AfCFTA, the reliance on the U.S. dollar for trade settlements could decline. More countries could adopt regional trade settlement systems using local currencies, strengthening African financial independence.
5. Reducing African Dependence on the U.S. and China
The U.S. tariff policy inadvertently encourages Africa to build a self-sufficient economy, reducing reliance on American and Chinese imports.
For instance, African tech startups can focus on localized innovations instead of depending on expensive American hardware, fostering a new era of industrialization.
Conclusion: A Turning Point in Global Economic Power
The U.S. 10% import tariff is not merely a domestic policy; it has global ramifications that could accelerate America’s decline as the dominant economic superpower.
While the move may aim to protect American jobs and industries, it risks alienating trade partners, reducing global confidence in the U.S. dollar, and opening doors for economic rivals like China and the European Union.
For Africa, however, this shift is a strategic blessing in disguise. As the U.S. turns inward, the AfCFTA can step up to fill the void, integrate Africa’s economies, and position the continent as the next global manufacturing and trade hub.
By leveraging this moment, Africa can transform from a raw-materials exporter into a competitive economic powerhouse, rewriting its role in the world order.
As global power realigns, the question is no longer whether the U.S. will maintain its hegemony but whether Africa will seize this moment to emerge as the next global economic frontier.
The writer, Ephraim Ofori Numosuor, is a Financial Economist | Research & Policy Analyst.
Email: [email protected]
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