US-China ‘Trade War’: What Implications For Nigeria?

My comments on the potential effects for Nigeria and Africa from a trade war between the US and China are quoted below in an article by “The Herald” a national Nigerian newspaper. (Not all of my comments are reported with complete accuracy)

The Herald Nigeria

US-China ‘Trade War’: What Implications For Nigeria?

The escalating trade disputes between the United States (U.S) and China have kept the global markets on their toes with uncertainties pervading the global economy and implications for other countries.

Analysts say the trade tensions between the world’s two largest economies portend consequences in commercial relations among countries as it has repercussions in differing degrees for some of these countries.

China constituted U.S. largest supplier of imported goods worth more than 500 billion dollars in 2017 while U.S. exports to China was approximately 185 billion dollars at the same time

However, U.S. President Donald Trump imposed varying degrees of tariffs on billions of dollars worth of Chinese products starting early 2018 and China also retaliated with its own tariffs on U.S. goods.

Since then, both countries have engaged in full-blown tit-for-tat measures that have unsettles the global markets in different degrees, which is gradually manifesting to a full-blown trade war.

Political-economists express concerns that African countries could be hit because of the global network of economies in that what affects the U.S. and China’s economies affects the entire global economy.

They say for instance, the impact was largely felt on the stock markets in Nigeria, Kenya and South Africa – with Nigeria and South Africa being the two largest economies on the continent.

Mr Lawrence Freeman, a U.S.-based Political-Economist Analysts for Africa, said that the trade war brewing between the two world superpowers could have dire economic consequences for Nigeria.

Freeman said: “If President Trumps precipitates a full-blown tariff war; it could disrupt the world economy, inflict financial penalties on China, and undermine China’s currency.

“This could lead to harmful effects for Nigeria, since both nations are coordinating currency transfers and have worked together to improve, Nigeria’s agriculture with billions of dollars of investment’’.

He opined that Trump’s trade war with China has serious political, economic, and even military implications for all nations of the world, alleging he {Trump} has little understanding of how an economy functions, and how to achieve real economic growth.

Trump is a follower of the myth of free-trade “buy low-sell dear” without regard for the economic security of a nation.

“For example, in the most recent meeting between Presidents Trump and Muhammadu Buhari, Trump proposed increasing the sale of U.S. agricultural products to Nigeria.

“This is the absolutely wrong approach. Nigeria should be reducing the amount of food imports by building up its agro-manufacturing sectors,’’ Freeman said.

Freeman also said that China, on the other hand, has embarked on an economically healthy policy of investing in infrastructure in Nigeria and Africa to drive economic growth, as evident in the Belt and Road Initiative.

According to him, Nigeria, like the rest of the African, needs massive investment in hard and soft infrastructure.

He noted that in collaboration with China, Nigeria is building railroads across the country for the first time since colonialism, observing further that this, with increasing energy production, “is essential for Nigeria to develop and achieve stability.

“President Trump should be more thoughtful in helping Nigeria overcome its huge infrastructure deficit, by joining China in expanding the BRI in Nigeria and across Africa.

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