Trump's Tariffs Spark a Global Economic Big Bang
By examining how President Trump’s impact is molding developments in Western, Asian, Middle Eastern (Arab), and African countries, we can gain deeper insights into what I refer to as "The Trump Effect," drawing parallels with the concept of the Big Bang. This analysis aims to foster a fairer viewpoint and promote negotiations instead of engaging in reciprocal trade conflicts.
An undeniable truth is that Trump is reshaping the global trade playbook, achieving this by stifling globalization—a trend that commenced from the latter part of the 18th century through the early 19th century. Contextualizing this historically, events such as the Silk Road and the Industrial Revolution—the latter beginning in Great Britain after the advent of the steam engine and mechanical loom—initiated worldwide commerce by facilitating large-scale manufacturing aimed at markets far exceeding local needs.
In today’s world, global commerce experienced considerable growth following the founding of the World Economic Forum (WEF) in 1971 in Davos, Switzerland. Ever since, international trade has followed principles laid out in the Davos Manifesto, promoting moral business practices, accountable leadership, and the impartial values of Swiss diplomatic ethos—the essence of globalization. This idealistic framework was officially documented in 1973 and later reaffirmed in 2020.
History demonstrates that global trade prospers under protection and stumbles without it. For example, during the first century BC, commerce in silk and spices between China and Rome prospered due to the safeguarding provided by strong empires. However, once these empires weakened, the trade routes and their economic vitality diminished as well.
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 then primarily known as a real estate developer, condemned China for allegedly taking advantage of the U.S. economy.
Trump is not the only one taking this stance. An old video surfaced from 1996 showing Nancy Pelosi, who was a Congresswoman from California at that time, speaking out against granting China a specific trading privilege. She opposed providing tariff breaks for goods coming from China—a position aligning with what Trump supports today.
To sum up, employing tariffs as a strategic instrument in international commerce traces back to both major political parties in the U.S. The shift 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 trade annals.
Therefore, Trump is essentially mirroring Pelosi's views by currently implementing significant tariffs. The key distinction lies in the scope: these increased duties aren’t confined to just China but have been expanded to cover approximately 180 countries, impacting around 60 nations notably.
Even more interestingly, reports suggest that as recently as 2019, Vermont Senator Bernie Sanders was also on record proposing the use of tariffs as a defense against unfair trade practices—an argument now forming the basis of Trump’s ongoing global tariff war, which has placed the world on edge.
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 subject to U.S. trade tariffs.
Economists estimate that around $3.3 billion worth of imports enter 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 provide more job opportunities for American workers from various backgrounds. Additionally, one of his main goals is to ensure equitable trade practices with other countries, as he claims these nations have been taking advantage of the US economically.
In the end, President Trump intends to utilize the funds generated from these elevated tariffs to address the $36 trillion budget deficit confronting the globe's biggest and strongest economic powerhouse.
Given these circumstances, Mr. Peter Navarro, who serves as an advisor to President Trump on trade matters, argues that substantial tariffs could yield more than $6 trillion for the United States economy 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 14% duty introduced by the United States on products from Nigeria and the 10% levy applied broadly throughout the 54 countries of the continent, Nigeria faces significant challenges with its exports to America—which were worth roughly $5 to $6 billion last year—are now jeopardized. Oil and gas constituted more than 90%, leaving non-oil and gas items contributing less than 10%.
Among the 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 remarkably 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.—ought to act as an awakening for Nigeria and Africa at large, prompting them to enhance the value of their exported items. For non-oil exports, which encounter a 10% tariff, to succeed in the American marketplace, they will have to advance along the value chain.
Nigeria's export prominence relies heavily on 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 region haven’t completely tapped into Africa as both a supply hub for raw materials and a market for their manufactured goods. Consequently, Africa has often been cast in the role of an aggrieved party due to this imbalance, holding what amounts to the disadvantageous side of the deal. Therefore, it needs to implement strategic and deliberate measures to alter this unfavorable storyline.
When I think about the Trump tariffs, they bring to mind deglobalization as international trade and investments among nations diminish. However, this worldwide tariff conflict presents Africa with a chance to redefine itself globally through unified action regarding intra-African commerce. This includes deciding which partners—whether within the Global South, West, or East—they should engage with under their own conditions rather than adhering to frameworks like those established during the partition of Africa in Berlin without African input. Those agreements saw European powers transform from slave traders into colonizers, profiting off the exploitation of the continent’s wealth after excluding Africans from crucial decisions.
• Magnus Onyibe, an entrepreneur, public policy analyst, author, democracy advocate, development strategist, alumnus of the Fletcher School of Law and Diplomacy, Tufts University, Massachusetts, USA, and a former commissioner in the Delta State government, sent this piece from Lagos, Nigeria.
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