Afreximbank Research has explained why the ongoing trade shift between the United States of America and China will have a limited impact on African countries, noting that the continent only has 17% trade exposure to both countries.
The Bank issued the explainer in response to the temporary halt in the trade war between the two giant economies, stating that whether the two countries eventually reach an agreement or not, “the direct impact on Africa is likely to be minimal.”
Highlighting the reasons, the Bank in a statement released on Tuesday stated:
“Africa’s direct trade exposure to the U.S. is approximately 5%, and to China, about 12%.
“Even when combined, this 17% is only slightly higher than Africa’s intra-continental trade, which stands at 16%.
“African exports to the UAE are even higher than to the USA. This reflects a more diversified and regionally integrated trade profile than often assumed.”
Other factors
Afreximbank also noted that only 11 African countries currently face U.S. tariffs above 20%, and just two of those export more than 10% of their goods to the U.S.
- According to the bank, in most cases, key exports such as oil, minerals, and agricultural products are exempt from punitive duties.
- It added that over 80% of African nations send less than 5% of their exports to the U.S., further limiting potential fallout.
- The bank also pointed out that among the few countries more exposed to U.S. tariffs, most have viable alternatives—regional markets, South-South trade partners, or commodity diversification—that allow them to adapt.
- These pivot pathways, it said, act as a buffer against economic disruption.
Supply chain adjustment
While noting that the tariffs represent a supply chain adjustment and not a collapse in global demand, the bank said both the U.S. and China will continue to require the goods they did pre-tariffs but may source them differently, opening space for alternative suppliers.
“US consumers will not stop demanding iPhones for egg, so demand for African exports used in their production won’t stop.
“So, rather than Africa supplying China raw materials to produce them as done previously, they may now supply the alternative market, now tasked with the responsibility to produce them to meet that demand.
“That suggests that African raw materials used in global production chains may remain in demand. But what may change is the route to market, not the market itself. At the same time, many African exports have structural and security dimensions, making them inelastic and consequently may continue to be demanded regardless,” it added.
Stronger macroeconomic foundations
According to Afreximbank, several African countries entered 2025 with improved fundamentals: slowing inflation, fiscal consolidation, credit rating upgrades, stronger growth, and renewed access to capital markets.
“Intra-African trade was also gaining momentum, adding to internal resilience,” the bank stated.
It added that African multilateral financial institutions such as Afreximbank have played an increasingly active role in supporting economies through recent global shocks, and their continued engagement in 2025 will be crucial in cushioning any spillover effects from U.S.-China trade shifts.
