US-China trade war has surpassed the top world news headlines these days and China’s quest to take over the digital technologies, its unfair competition strategy might be the reasons for the issue. The ongoing trade war has significant repercussions on global trade which further headed towards a global economic recession.
Africa is also not saved from dire results of worldwide economic recession as most of its nations run their administration with the help of aid and foreign direct investment from developed countries. Global economic recession will definitely reduce the aid and FDI to African nations which will result in fewer jobs and less capital investment.
Nowadays, China has emerged out as a leading trade partner of Africa. Its trade with the continent has increased 10 times since 2000. If the US imposed tariffs on China then it will automatically affect the supply of raw materials to African nations.
China’s total importation and exportation volume with Africa recorded US$204.19 billion in 2018. China sanctioned loans of US$1 billion to many African countries. The trade war will affect China’s capital and economy and will cause less aid or trade with Africa which further recessed the African economies.
The US protective policies have impacted and tumbled the major markets like Nigeria, Kenya and South Africa across the continent. Except South Africa, none of the African countries is cable enough to replace US and Chinese companies. Many African nations have shortages of foreign exchange which reduces their imports.
The US has put tariffs on steel and aluminum which is also influencing steel and aluminium industry in Africa. Jobs at these industries are also at risk. However, wine, fruit, and nut business improved in South Africa after China hit 15% retaliatory tariff on Washington.
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