What do US tariffs mean for Africa’s supply chains?

Since the term globalization gained prominence in the 1990s during the post-Cold War era, the phenomenon has enhanced the integration, interconnectedness and interdependence of markets, economies, cultures and societies. The transnational flow of goods, services, capital, technology, information and people has, until recently, continued unceasingly.

From a supply chain management perspective, globalization has significantly heightened the complexity of supply chains. It has increased the number of interactions and transactions among various stakeholders at different critical stages. Such interactions generally occur at the upstream stage (where raw materials are sourced), the midstream stage (where raw materials are processed), and the downstream stage (encompassing all activities that enable the delivery of processed products or services to the end consumer).

Examples of this complexity include size (number of suppliers), diversity (diversity of suppliers), density (interconnectedness of suppliers), length (number of layers in a network), width (geographical dispersion of supply chain members), strength (interdependence of supply chain members) and product characteristics (number of different product components and how they interact).

A significant challenge is how global supply chain actors navigate and comply with multiple regulations, including customs and import/export trade policies set by different countries through which goods and services cross their borders. This is where tariffs come into play.

Between January and April 2025, the US trade-weighted average tariff — essentially a measure of the average duty paid to import goods — rose from 2% to an estimated 24%, the highest level in more than a century. President Donald Trump's series of significant tariffs on virtually all goods imported into the US represents a major intensification of trade protectionism and marks the beginning of a new economic era, changing the dynamics of global supply networks, international relations and economic policy.

As we enter this new era, experts continue to debate whether these significant policy changes will bring long-term economic, environmental and social benefits to the US. These recent developments also illustrate the complex relationship between politics and supply chains. For example, in reaction to the US president’s remarks about Greenland, tariffs and other policies, boycotts of US products have emerged throughout the EU. For example, in Denmark, various grocery chains are already marking products with a star sign to facilitate exclusive European shopping.

Recent events demonstrate how politics has a profound impact on supply chains through regulations, trade policy and geopolitical events, presenting both opportunities and challenges for companies and governments. Changes in these areas can affect costs, sourcing strategies and potentially the geographic location of production, making supply chains vulnerable to political manipulation.

This tariff upheaval raises significant concerns for Africa, a continent that has benefited from its integration into the global value chain. The International Monetary Fund (IMF) and other organizations have expressed concern that a shift towards geo-economic fragmentation, characterized by the emergence of competing trading blocs (such as the EU, China, US) could have a severe impact on sub-Saharan Africa. The IMF predicts that this could lead to a sustained decline in Africa's real GDP, potentially affecting its ability to access key export markets and face higher import costs.

Rather than lamenting about rising tariffs and vanishing aid, this should be a wake-up call for Africa to shift gears – look inward with pride, deepen cross-border collaboration, and build the continent with bold intent.

The current challenges related to politics and supply chains could be a generational opening for Africa to start creating its own economic blueprint. Here's how this can become a reality:

The current trade environment underscores the need to address Africa’s value chain position trap. African nations can no longer afford to continue exporting raw materials while importing completed products at higher costs; they need to move up the global value chain.

The continent possesses 30% of the world's mineral reserves, including significant deposits of valuable metals such as platinum and gold, as well as developing minerals like lithium and copper. Why should African nations such as the Democratic Republic of the Congo export mined minerals like cobalt and lithium, while later repurchasing the batteries, electronics and cars necessary for comprehensive value addition? Why should African nations such as the Ivory Coast send cocoa to Europe and the US, only to import chocolate, cocoa powder and cocoa butter? By focusing on processing and manufacturing, African nations can reduce reliance on raw commodity exports and enhance their competitiveness in global markets.

This is the time for the aggressive implementation and operationalization of the African Continental Free Trade Area (AfCFTA). As global trade becomes more unpredictable and new tariffs disrupt traditional export routes, Africa must move quickly to reduce its dependence on external markets.

AfCFTA presents a unique opportunity for the continent to build resilience from within. African countries can unlock new economic opportunities across borders by lowering trade barriers among member states and improving regional infrastructure. This shift allows goods, services and value to flow more freely across the continent, strengthening local supply chains and creating new markets for African producers. Rather than waiting to absorb the shock of global trade decisions made elsewhere, African economies can take control of their own growth.

In the face of rising global tariffs and trade uncertainty, African leaders must prioritize harmonizing public procurement systems across the continent. With public procurement accounting for around 17% of Africa’s GDP, this sector holds untapped potential to stimulate intra-African economic activity and reduce reliance on external markets.

Harmonizing procurement systems would enable African companies to bid for government contracts in any member state without redundant registration processes, stimulating local production, strengthening regional value chains and reducing dependency on external markets. Drawing lessons from the EU’s long-established cross-border public procurement model – which has promoted competition, transparency and economic cohesion – Africa can leverage government spending more strategically to turn internal demand into a powerful driver of industrialization and economic self-reliance. This public component seems missing in the AfCFTA vision – which focuses on reducing tariffs and facilitating cross-border trade – but it is crucial to building resilience against external shocks.

Africa's population has surpassed 1.5 billion people. Its demographics are projected to be the youngest globally, and by 2050 one in four people on the planet will be from Africa. This has significant implications for the workforce needed to contribute to value creation. However, population alone is not in itself an economic asset. In fact, with the rise of robotics and AI, large populations without adequate skills development or infrastructure can become a liability rather than a strength. Ministries of education, universities and relevant research organizations have a key role to play in facilitating education and training that matches industry-relevant expertise appropriate to emerging sectors and developing economies. They can also work collaboratively to provide impactful interdisciplinary education and research that integrates technology adoption, innovation, ethics and integrity, and sustainable management for Africa's growing population.

Starting now, African leaders have a role to play in taking bolder steps that prioritize the continent’s future through better policies and governance models. Given the continent's rich mineral resources and ample potential to contribute to the global economy, this is Africa's moment to wake up. As the global trade landscape continues to change in response to tariffs, this presents a strategic opportunity for Africa to emerge as a leader in the global value chain.