Former Vice President Dr. Mahamudu Bawumia has pushed back against the idea that tariffs can resolve trade imbalances, stating that such deficits are rooted in broader macroeconomic issues rather than flawed trade policies.
Speaking at the International Democracy Union (IDU) Forum in Brussels on May 17, Dr. Bawumia addressed the rising trend of using trade as a geopolitical tool. He emphasized that many policymakers are ignoring both fundamental economics and lessons from history.
“Africa plays a small role in global trade, accounting for just 2.5% of exports and 2.9% of imports, while regions like Asia, Europe, and North America dominate trade flows,” he noted.
Dr. Bawumia firmly stated that tariffs are ineffective at correcting trade deficits. “You cannot fix a trade deficit with tariffs—it simply doesn’t work,” he said, explaining that such deficits stem from a country’s spending exceeding its savings, a macroeconomic issue rather than a trade policy failure.
To reinforce his point, he cited the U.S. Smoot-Hawley Tariff Act of the 1930s, which deepened the Great Depression, and the 2018–2019 U.S.-China tariff war, which disrupted global trade. He pointed out that the recent jump in U.S. tariff rates from 2.4% to 10% marks the steepest rise since 1943 and could have far-reaching effects.
While Africa is somewhat shielded from direct U.S. trade turbulence—with only 6.5% of its exports and 4.4% of its imports tied to the U.S.—some nations remain vulnerable. For example, Lesotho depends on the U.S. market for half of its textile exports under AGOA.
Looking ahead, Dr. Bawumia predicted that African nations will increasingly focus on economic self-reliance and boosting intra-African trade to mitigate external shocks and build a more resilient economic future.
