In early April 2025, U.S. President Donald Trump invoked the International Emergency Economic Power Act to implement a universal 10% tariff on all imports to the United States, including goods from Ghana. The White House stated that the tariff aims to address the U.S.’s trade deficit and perceived unfair trade practices by its trading partners. The move is already causing ripples across Ghana’s economy and could prompt African nations to push harder for economic integration through the African Continental Free Trade Area (AfCFTA).
The Impact of the U.S. Tariff on Ghana’s Economy
Ghana’s export sector is one of the key areas affected by the new U.S. tariff. In 2023, Ghana exported goods worth approximately $787.79 million to the United States, including vital products like mineral fuels and oils, cocoa, apparel, and agricultural goods. The imposition of a 10% tariff threatens the competitiveness of these products in the U.S. market, especially for industries like cocoa, textiles, and agricultural exports.
Ghana’s cocoa sector, which is one of the country’s largest sources of export revenue, faces significant challenges due to the tariff. Cocoa derivatives, including processed cocoa products, are vital exports to the U.S. and may see a reduction in demand or higher costs as a result of the new tariff. Other products, such as textiles and agricultural products like cashew nuts, shea butter, and fruits, are also likely to experience a decline in competitiveness.
While some major exports like gold and crude oil may be exempt from the tariffs, uncertainties remain about their long-term status. The Ghanaian government has already begun discussions with U.S. trade officials to address these concerns and seek possible exemptions or adjustments to the policy.
Calls for Stronger Intra-African Trade
The tariff imposition has sparked discussions within Ghana and across the African continent about the need to strengthen intra-African trade. Abraham Koomson, Secretary-General of the Ghana Federation of Labour, called the tariff a “wake-up call” for Africa to boost its economic resilience by enhancing trade between African nations.
Koomson emphasized the need for African leaders to respond with vision and unity, leveraging the AfCFTA to chart a path towards economic independence and shared prosperity. The AfCFTA, which aims to create a single market for goods and services across 54 African countries, offers an ideal platform for Ghana and other African nations to mitigate the impact of external trade barriers like the U.S. tariff.
Koomson also highlighted the potential drawbacks of the tariff, noting that it could lead to higher production costs and increased prices for American consumers, thereby affecting global markets.
Leveraging AfCFTA for Economic Growth
The AfCFTA presents an opportunity for African nations to reduce their dependency on external markets and to focus more on internal trade. By promoting regional trade, the AfCFTA aims to foster industrialization, create jobs, and stimulate economic growth within the continent. Ghana, in particular, is seeking ways to benefit from this initiative.
In response to the U.S. tariff, Ghanaian exporters are increasingly looking to redirect their focus from traditional markets like the U.S. to emerging opportunities within the AfCFTA framework. The Federation of Associations of Ghanaian Exporters (FAGE) is spearheading this shift, helping exporters tap into the growing African market.
In addition, policy think tanks like IMANI Africa have been urging the Ghanaian government to diversify its trade partnerships beyond the U.S. and explore new markets with entities like China and the European Union. This diversification could help mitigate the potential negative impact of the U.S. tariffs and reduce Ghana’s reliance on a single external market.
Strategic Responses to the Tariff
Ghana’s response to the new tariff has been strategic. While diversifying trade partnerships, the government is also focusing on strengthening its relationships with other African nations through the AfCFTA. By increasing trade within Africa, Ghana hopes to cushion itself from the economic shocks caused by external trade barriers.
The shift to intra-African trade also aligns with the broader goals of the AfCFTA, which seeks to make Africa less dependent on foreign markets and create a more self-sustaining economy. Ghana and other African countries have recognized the importance of this shift and are taking steps to enhance their economic integration.
While the 10% tariff imposed by the U.S. presents immediate challenges for Ghana’s export sector, it also serves as a catalyst for the country and the African continent to intensify efforts towards economic integration through the AfCFTA. By enhancing intra-African trade, diversifying export markets, and reducing reliance on external partners, Ghana and its African counterparts can build a more resilient and self-sustaining economic future. The tariff may have sparked some uncertainty, but it also highlights the need for Africa to take control of its economic destiny.
