Trade War Pushes China Deeper into Africa, the United States into Contraction by Salman Rafi Sheikh!
(2025-03-21 at 05:28:38 )

Trade War Pushes China Deeper into Africa, the United States into Contraction by Salman Rafi Sheikh!

The ongoing United States-China trade war, escalated by the Trump administration, is pushing Beijing to strengthen its economic ties with Africa.

Trade War Pushes China Deeper into Africa, the United States into Contraction

Trump vs China: Beyond Trade War

With over US$293 billion annually in 2024, China has been Africas largest trading partner for the past several years. Beijing, thus, has already displaced Western legacies of colonialism and the Cold War on the continent. Around 20% of the regions exports now go to China, and about 16% of Africas imports come from China. This trend is, however, only going to get massively reinforced in the wake of the ongoing United States-China trade war, with Chinese products being hit by United States tariffs likely to find their way into Africa. Africa also stands to gain by importing more to China.
Chinese wealth will go to Africa more and more in the years to come

This is not a coincidence that soon after Trump was sworn in, Beijing also announced new measures to engage with Africa. The new policy spans across several key areas to boost mutual trade. These areas specifically involve strengthening China-Africa industrial and supply chain integration, building self-controlled logistics systems, ensuring a stable supply of key resources, enhancing financial support, and establishing long-term cooperation mechanisms. This is not just to ensure that Chinese products end up in China. In the wake of Chinese tariffs on United States agricultural products, China has steadily increased its agricultural imports from Africa. It was, in fact, in September 2018, i.e., during the first Trump presidency, when China set up a China-Africa trade expo to foster deeper cooperation in the field of agriculture.

Key Chinese companies are investing in African agriculture with a view to reducing Chinese dependence on the United States. Chinas agritech giant Longping High-Tech, based in Hunan province, is investing in Tanzanias Soybean Farms. The target makes sense because China is the United States top market for Soybean imports.

In retaliation to the Trump administrations sanctions on China, Beijing cancelled on the 5th of March the license of three United States firms exporting Soybeans to China. This was in addition to Chinas decision announced on the same day to impose additional tariffs on various United States agricultural and food products including soybeans, wheat, meat and cotton worth US$21 billion. On the other hand, more and more African agricultural products have been ending in the Chinese market already since late 2024, which indicates Chinas advanced preparations for effectively tackling Trumps trade war.

During the 2024 Summit of the Forum on China-Africa Cooperation (FOCAC), which took place in Beijing in early September, China signed cooperation agreements with many African countries on the export of agricultural products. This included an agreement with Zimbabwe on the export of fresh avocadoes, an agreement with Zambia on the export of soybeans, an agreement with Mozambique on the export of pigeon peas, macadamia nuts and cashew nuts, an agreement with Namibia on the export of sheep and goat meat, and an agreement with Rwanda on the export of bee honey. China is, therefore, very much on the path to diversifying its imports and exports to minimize the impact of United States policies.

Statistics indicated that in the first seven months of 2024, China imported 25.35 billion yuan of agricultural products from Africa, an increase of 7.2 per cent, a rate higher than the overall growth rate of Chinas agricultural product imports. The import volume of African agricultural products such as sesame, flue-cured tobacco and macadamia nuts increased by 38.8 per cent, 32.7 per cent and 106.2 per cent respectively, accounting for more than 40 per cent of Chinas import volume of similar products.

The United States Economys contraction

The GDPNow model of the Federal Reserve Bank of Atlanta estimates that economic growth in the United States in the current quarter was a stunning -2.8% on Monday (March 3), down from +2.3% last week (end of February). A month ago the model showed that growth in the January-March period was tracking close to +4.0%. This is a stunning development insofar as it collides directly with the Trump administrations tall claims that tariffs will help the United States economy.

Its major reason is high inflation. The impact is nothing surprising. By imposing high tariffs, the Trump administration is only ensuring high prices (due to tariffs) and low sales (due to prices being ultimately high). That is why stock markets in the United States are already falling. In the first week of March, the S&P 500 index, which tracks 500 of the biggest companies in the United States, fell for a second day, ending at its lowest level since November when Trump won the election. This is already adding to increasing fears of a recession in the United States.

Even Donald Trump is not unmindful of this impact. Although he is saying his objective is to bring wealth back into the United States, he does not have a clear plan to do this. Instead, he is repackaging the impact of the ongoing trade war with China (and Canada and Mexico) as an "economic transition" in which such periods of inflation, contraction, and recession are expected.

But most Americans - including experts - remain unclear as to how imposing tariffs will help get out of this situation. Chinas response shows that its decision to divert its imports of agricultural products will reduce the inflow of wealth into the United States. Chinese wealth will go to Africa more and more in the years to come.

What this war will do to the United States in the short and long run is not hard to predict. Washington,D.C.s shift away from Europe, with Musk suggesting the United States exit from NATO, combined with its widening rift with China is the potential recipe for terminal decline. The hegemon may have reached its limits, leaving it unable to overcome its fatigue.

Salman Rafi Sheikh, research analyst of International Relations and Pakistans foreign and domestic affairs

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