1
00:00:02,520 --> 00:00:07,040
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:09,240 --> 00:00:13,240
Speaker 2: President Trump has imposed sweeping tariffs on countries across the

3
00:00:13,280 --> 00:00:16,759
Speaker 2: African continent on a day that saw America impose its

4
00:00:16,800 --> 00:00:18,720
Speaker 2: steepest tariffs in a century.

5
00:00:19,040 --> 00:00:21,760
Speaker 3: Our nations will finally be asked to pay for the

6
00:00:21,800 --> 00:00:25,640
Speaker 3: privilege of access to our market, the biggest market in

7
00:00:25,680 --> 00:00:26,120
Speaker 3: the world.

8
00:00:26,320 --> 00:00:29,200
Speaker 2: All corners of Africa have been hit, including a fifty

9
00:00:29,240 --> 00:00:33,280
Speaker 2: percent terra for Lisutu and fourteen percent for Nigeria. In

10
00:00:33,320 --> 00:00:36,599
Speaker 2: announcing a thirty percent levee for South Africa, the President

11
00:00:36,720 --> 00:00:39,640
Speaker 2: again referred to unfounded conspiracy theories.

12
00:00:40,320 --> 00:00:43,839
Speaker 3: Then they've got some bad things going on in South Africa.

13
00:00:44,000 --> 00:00:47,160
Speaker 3: You know we're paying them billions of dollars a week.

14
00:00:47,159 --> 00:00:49,360
Speaker 3: Cut the funding because a lot of bad things are

15
00:00:49,360 --> 00:00:51,519
Speaker 3: happening in South Africa. The fake news are to be

16
00:00:51,560 --> 00:00:53,080
Speaker 3: looking at it. They don't want to report it.

17
00:00:53,560 --> 00:00:56,440
Speaker 2: On this week's Next Africa Podcast, we look at what

18
00:00:56,640 --> 00:00:59,400
Speaker 2: this global trade war will mean for the continent and

19
00:00:59,440 --> 00:01:01,760
Speaker 2: what the fall out will be for economies as the

20
00:01:01,800 --> 00:01:08,119
Speaker 2: world faces up to a revolution in global trade. I'm

21
00:01:08,200 --> 00:01:11,959
Speaker 2: Jennifer's Abazanja and this is the Next Africa Podcast, bringing

22
00:01:12,000 --> 00:01:14,800
Speaker 2: you one story each week from the continent, driving the

23
00:01:14,840 --> 00:01:19,880
Speaker 2: future of global growth with the context only Bloomberg can provide.

24
00:01:21,280 --> 00:01:24,520
Speaker 2: Joining me to discuss this breaking news is Bloomberg Economics

25
00:01:24,560 --> 00:01:28,039
Speaker 2: Africa Economists, that is Yvonne Mango Ivon. Thanks again for

26
00:01:28,120 --> 00:01:31,240
Speaker 2: joining us back on the podcast. This is a fast

27
00:01:31,240 --> 00:01:34,480
Speaker 2: moving story. Just break down the latest for US and

28
00:01:34,520 --> 00:01:38,040
Speaker 2: what we know about how African countries are going to

29
00:01:38,080 --> 00:01:41,160
Speaker 2: be affected by these tariffs that Trump just announced.

30
00:01:41,760 --> 00:01:45,040
Speaker 1: Well, if we look across the fifty countries on the continent,

31
00:01:45,080 --> 00:01:48,040
Speaker 1: there seems to be one criteria by which they used

32
00:01:48,520 --> 00:01:50,840
Speaker 1: in order to impose the TERFs. And this is not

33
00:01:50,880 --> 00:01:53,680
Speaker 1: just for Africa, it's global. So for any country that

34
00:01:53,760 --> 00:01:57,240
Speaker 1: the US had a trade deficit with, regardless of the

35
00:01:57,280 --> 00:01:59,760
Speaker 1: size of it, whether it's in millions or billions or dollars,

36
00:02:00,320 --> 00:02:02,720
Speaker 1: they've been posed tariffs that are higher than ten percent.

37
00:02:03,400 --> 00:02:07,080
Speaker 1: For countries that the US has trade surpluses with, it's

38
00:02:07,120 --> 00:02:11,000
Speaker 1: been that flat baseline tariff of ten percent. So in

39
00:02:11,040 --> 00:02:14,720
Speaker 1: the case of South Africa, which last year exported fourteen

40
00:02:14,960 --> 00:02:18,359
Speaker 1: billion dollars worth of goods to the US, South Africa

41
00:02:18,400 --> 00:02:21,320
Speaker 1: I enjoyed a trade surplus with the US, which implied

42
00:02:21,360 --> 00:02:25,560
Speaker 1: the trade deficit for the American market. As you saw,

43
00:02:25,680 --> 00:02:29,160
Speaker 1: it was imposed of a significantly higher tariff than the

44
00:02:29,200 --> 00:02:33,760
Speaker 1: baseline of around thirty percent. And that's similar for other

45
00:02:33,800 --> 00:02:38,760
Speaker 1: African countries that also have trade surpluses with the United States.

46
00:02:39,160 --> 00:02:42,359
Speaker 2: And we of course heard President Trump singling out in

47
00:02:42,440 --> 00:02:47,280
Speaker 2: particular South Africa as he has previously. Do we know

48
00:02:47,400 --> 00:02:51,280
Speaker 2: yet what the impact of these tariffs are going to be,

49
00:02:51,680 --> 00:02:54,240
Speaker 2: especially when you take a look at some of these

50
00:02:54,600 --> 00:02:57,799
Speaker 2: smaller I mean it's relative, but smaller countries that have,

51
00:02:58,120 --> 00:03:01,400
Speaker 2: you know, their own resources that they've exported. What could

52
00:03:01,440 --> 00:03:03,800
Speaker 2: we see the impact being economically?

53
00:03:04,800 --> 00:03:06,440
Speaker 1: So we don't know, but we can sort of get

54
00:03:06,480 --> 00:03:08,920
Speaker 1: an idea or these speculate in terms of what the

55
00:03:09,040 --> 00:03:12,480
Speaker 1: impact could be. So I'll pick Klasuti for instance, a

56
00:03:12,520 --> 00:03:16,880
Speaker 1: small mountain kingdom that sits within South Africa's borders. They've

57
00:03:16,880 --> 00:03:20,760
Speaker 1: been hit with the large tariff of fifty percent. That's

58
00:03:20,960 --> 00:03:24,400
Speaker 1: pretty surprising given that it's a very small economy with

59
00:03:24,720 --> 00:03:26,880
Speaker 1: exports to the US that are only in the millions

60
00:03:26,880 --> 00:03:29,880
Speaker 1: of dollars, so it's not even a threat to the

61
00:03:29,960 --> 00:03:32,560
Speaker 1: United States. But they've been hit this big tariffs. What

62
00:03:32,639 --> 00:03:36,120
Speaker 1: does listened to export? It exports apparel, which is garments

63
00:03:36,200 --> 00:03:40,680
Speaker 1: essentially and diamonds. Now, what's unfortunate about the imposition of

64
00:03:40,720 --> 00:03:44,960
Speaker 1: this high tariff on Lisutu is the export industry was

65
00:03:45,040 --> 00:03:49,920
Speaker 1: actually something that was promoted by US policy. As you know, Lsutu,

66
00:03:50,040 --> 00:03:54,840
Speaker 1: like several African countries, enjoyed duty free access to the

67
00:03:54,960 --> 00:03:57,840
Speaker 1: US market under a GOA that's after and Growth and

68
00:03:57,880 --> 00:04:01,840
Speaker 1: Opportunity Act. And part of that or the reasoning behind

69
00:04:01,960 --> 00:04:06,240
Speaker 1: the US promoting such a policy was to help countries

70
00:04:06,360 --> 00:04:10,280
Speaker 1: develop using exports or export driven growth. And that's that's

71
00:04:10,280 --> 00:04:14,240
Speaker 1: exactly what Lissutu did and created this apparol industry. And

72
00:04:14,280 --> 00:04:16,760
Speaker 1: now they're being penalized for doing so well at developing

73
00:04:16,760 --> 00:04:18,840
Speaker 1: this industry to the point where they had a small

74
00:04:18,920 --> 00:04:21,360
Speaker 1: trade surplus of the United States, and now they've been

75
00:04:21,400 --> 00:04:24,599
Speaker 1: slapped fifty percent tariff. Now the question is, so what

76
00:04:24,720 --> 00:04:27,800
Speaker 1: happens to those garments. So the alternative, I guess, would

77
00:04:27,800 --> 00:04:30,839
Speaker 1: be for Lisutu to try and find an alternative market.

78
00:04:31,240 --> 00:04:34,800
Speaker 1: That of course cannot happen overnight. Some businesses may not

79
00:04:34,880 --> 00:04:37,120
Speaker 1: be able to do it soon enough in order to

80
00:04:37,200 --> 00:04:41,000
Speaker 1: keep their businesses open essentially, and that's the one challenge.

81
00:04:41,200 --> 00:04:43,360
Speaker 1: The other issue which we find prely odd is that

82
00:04:43,440 --> 00:04:46,640
Speaker 1: in the SUITUS case, half of their exports are diamonds.

83
00:04:46,680 --> 00:04:49,599
Speaker 1: That's war materials. And actually, if you look at several

84
00:04:49,600 --> 00:04:51,680
Speaker 1: of the African countries that have trade surplus, is the

85
00:04:51,800 --> 00:04:55,560
Speaker 1: US they're exporting war materials. And if you look at

86
00:04:55,600 --> 00:04:58,880
Speaker 1: the reasoning behind Trump's tariff policy, part of it is

87
00:04:58,920 --> 00:05:02,600
Speaker 1: to bring manifes actually jobs back to the United States.

88
00:05:03,680 --> 00:05:06,039
Speaker 1: Slapping these high times and often countries is not going

89
00:05:06,120 --> 00:05:09,080
Speaker 1: to you know, it doesn't fit that narrative because a

90
00:05:09,080 --> 00:05:12,479
Speaker 1: lot of those exports were raw materials. Number one, it

91
00:05:12,520 --> 00:05:15,640
Speaker 1: doesn't fit that narrative. And number two, it implies that

92
00:05:15,680 --> 00:05:19,039
Speaker 1: Africa is going to have to source alternative markets for

93
00:05:19,120 --> 00:05:21,640
Speaker 1: their raw materials. But the third point I'm probably going

94
00:05:21,720 --> 00:05:23,440
Speaker 1: to make is what we're likely going to see over

95
00:05:23,440 --> 00:05:25,960
Speaker 1: the next weeks to come is a lot of those

96
00:05:26,000 --> 00:05:30,760
Speaker 1: countries pursuing bilateral trade agreements with the United States to

97
00:05:30,760 --> 00:05:33,920
Speaker 1: try and get concessions because it will be very difficult

98
00:05:34,000 --> 00:05:37,680
Speaker 1: for several countries to find alternative markets for their exports.

99
00:05:39,040 --> 00:05:43,320
Speaker 2: And we've heard some countries actually talk about some of

100
00:05:43,360 --> 00:05:46,920
Speaker 2: these potential bilateral agreements, especially as a GOA. The expiration

101
00:05:47,000 --> 00:05:50,159
Speaker 2: of a GOA comes close to an end at the

102
00:05:50,240 --> 00:05:53,240
Speaker 2: end of this year. I wonder, from your perspective, does

103
00:05:53,279 --> 00:05:57,120
Speaker 2: this all but mean that a GOA is done and

104
00:05:57,120 --> 00:05:57,800
Speaker 2: done in the water.

105
00:05:58,120 --> 00:05:59,840
Speaker 1: I think the short answer to your question is yes,

106
00:06:00,920 --> 00:06:04,640
Speaker 1: the cuprocal tarff supersedes a GOA. That's all understanding, and

107
00:06:04,640 --> 00:06:06,760
Speaker 1: they'll be imposed as soon as I think it's the

108
00:06:06,839 --> 00:06:10,240
Speaker 1: ninth of April. So everyone is working with these tariffs

109
00:06:10,279 --> 00:06:13,200
Speaker 1: as we speak, and this is the basis of any

110
00:06:13,240 --> 00:06:16,359
Speaker 1: negotiations that countries want, but it won't be a multilateral

111
00:06:16,520 --> 00:06:18,680
Speaker 1: trade agreement as it was previously. Countries are going to

112
00:06:18,760 --> 00:06:22,280
Speaker 1: have to pursue bilateral agreements to try and get concessions.

113
00:06:22,640 --> 00:06:23,920
Speaker 1: But I don't think we're going to go back to

114
00:06:23,920 --> 00:06:26,360
Speaker 1: the days whereby the countries that are a party to

115
00:06:26,440 --> 00:06:29,200
Speaker 1: this a GOA act are going to get the same

116
00:06:29,279 --> 00:06:31,560
Speaker 1: duty free access that got previously. I think those days

117
00:06:31,560 --> 00:06:33,479
Speaker 1: are gone. I think the best you can hope for

118
00:06:33,680 --> 00:06:36,480
Speaker 1: is ten percent. What is the baseline that the US

119
00:06:36,520 --> 00:06:37,480
Speaker 1: is imposing.

120
00:06:37,600 --> 00:06:39,960
Speaker 2: Stick with us VON When we come back, we'll talk

121
00:06:40,040 --> 00:06:42,520
Speaker 2: more about what the fallout from this global trade war

122
00:06:42,560 --> 00:06:51,800
Speaker 2: could mean for the continent. We'll be right back. Welcome

123
00:06:51,800 --> 00:06:55,000
Speaker 2: back today on the podcast we're looking into President frum

124
00:06:55,160 --> 00:06:59,960
Speaker 2: sweeping tariffs that are having repercussions across the world. Bloomberg

125
00:07:00,040 --> 00:07:04,279
Speaker 2: Economics African economists Ivon Mango is with us this week. Ivon,

126
00:07:04,440 --> 00:07:07,520
Speaker 2: we have seen a global market sell off as these

127
00:07:07,600 --> 00:07:11,000
Speaker 2: cariffs are having a worldwide impact. When we think about

128
00:07:11,000 --> 00:07:14,040
Speaker 2: African economies, we think about the raw materials that you

129
00:07:14,080 --> 00:07:16,800
Speaker 2: were just mentioning that are critical for many of these economies,

130
00:07:17,080 --> 00:07:21,000
Speaker 2: and of course a number of volatile currencies within these economies.

131
00:07:21,480 --> 00:07:22,880
Speaker 2: What's the effect going to be?

132
00:07:23,640 --> 00:07:26,720
Speaker 1: So let's speak to South Africa in terms of the

133
00:07:26,720 --> 00:07:29,800
Speaker 1: goods that or the products that enjoyed a GOA access.

134
00:07:29,920 --> 00:07:32,760
Speaker 1: That was mainly the automotive industry, as well as the

135
00:07:32,840 --> 00:07:36,560
Speaker 1: citrus industry, which is part of our flourishing agriculture industry.

136
00:07:36,880 --> 00:07:40,720
Speaker 1: A lot of companies in those particular industries targeted themselves

137
00:07:40,760 --> 00:07:43,520
Speaker 1: to the United States market, so you can imagine at

138
00:07:43,560 --> 00:07:46,280
Speaker 1: this point in time and time they'll be floundering. The

139
00:07:47,080 --> 00:07:50,720
Speaker 1: option is to try and diversify your markets, which I

140
00:07:50,800 --> 00:07:54,680
Speaker 1: think we're already seeing in the agriculture industry, particularly to Asia.

141
00:07:54,760 --> 00:07:57,520
Speaker 1: I think one new market opened recently, which is the Philippines.

142
00:07:57,560 --> 00:08:00,000
Speaker 1: For South Africa so there is this push forward diversification,

143
00:08:00,840 --> 00:08:03,640
Speaker 1: but on the automotive side. In terms of alternatives, you've

144
00:08:03,640 --> 00:08:06,280
Speaker 1: got the EU as well. But as I mentioned earlier,

145
00:08:06,400 --> 00:08:09,560
Speaker 1: it takes time to make those agreements and for that

146
00:08:09,600 --> 00:08:12,880
Speaker 1: to take place. And also keep in mind these tariffs

147
00:08:12,880 --> 00:08:15,880
Speaker 1: are global, so the h country is bearing the impact

148
00:08:16,000 --> 00:08:19,960
Speaker 1: of these tariffs, and particular, if your export industry takes

149
00:08:19,960 --> 00:08:23,120
Speaker 1: a knock, it does have implications for growth. So we're

150
00:08:23,160 --> 00:08:25,840
Speaker 1: expecting a slow down in growth from many of the

151
00:08:25,960 --> 00:08:31,200
Speaker 1: major economies, which are also sizeable markets for African countries.

152
00:08:31,760 --> 00:08:35,160
Speaker 1: So while yes, the ideal thing will be to look

153
00:08:35,160 --> 00:08:38,840
Speaker 1: for alternative market, those markets themselves will also be floundering

154
00:08:38,920 --> 00:08:41,640
Speaker 1: because demand on their side will slow down and that

155
00:08:41,720 --> 00:08:45,040
Speaker 1: has implications for our capacity to find markets for our.

156
00:08:45,040 --> 00:08:49,600
Speaker 2: Exports certainly, and one of those could very directly be China,

157
00:08:49,840 --> 00:08:54,120
Speaker 2: right correct, What could that spill over? And again we

158
00:08:54,200 --> 00:08:57,200
Speaker 2: know it is still very early China direct line of

159
00:08:57,240 --> 00:08:59,760
Speaker 2: fire to a certain extent of these tariffs. What could

160
00:08:59,800 --> 00:09:02,120
Speaker 2: that spill over mean for the continent.

161
00:09:03,080 --> 00:09:06,600
Speaker 1: So the main product that China consumes from Africa are

162
00:09:06,679 --> 00:09:09,719
Speaker 1: raw material so it's your crude oil and minerals such

163
00:09:09,720 --> 00:09:13,600
Speaker 1: as copper. In some instances, particularly comes to critical minerals.

164
00:09:13,679 --> 00:09:17,280
Speaker 1: There's still this race between the US and China for

165
00:09:17,360 --> 00:09:21,320
Speaker 1: those particular minerals. So I'd imagine countries that have critical

166
00:09:21,360 --> 00:09:25,360
Speaker 1: minerals will still be in a position to get concessions

167
00:09:25,559 --> 00:09:28,440
Speaker 1: from the United States given that there's this race for

168
00:09:28,480 --> 00:09:31,559
Speaker 1: those minerals. So that's what we anticipate, at least for

169
00:09:31,600 --> 00:09:33,960
Speaker 1: the exporters of critical minerals, which includes the like of

170
00:09:34,040 --> 00:09:38,360
Speaker 1: the Democratic Republic of Congo, Zambia and also South Africa.

171
00:09:38,840 --> 00:09:42,720
Speaker 1: That's what we anticipate in terms of the other raw materials,

172
00:09:42,720 --> 00:09:46,480
Speaker 1: including coude. So we have seen exporters of cood also

173
00:09:46,480 --> 00:09:49,800
Speaker 1: being slapped to high tariffs, such as Algeria simply because

174
00:09:49,800 --> 00:09:52,240
Speaker 1: they have a trade surplace of the US. Once again,

175
00:09:52,679 --> 00:09:55,560
Speaker 1: you know, it's easy enough to find an alternative market

176
00:09:55,679 --> 00:10:00,280
Speaker 1: if demand is strong globally. What will probably have and

177
00:10:00,400 --> 00:10:03,000
Speaker 1: is this could impact pricing. So while you may be

178
00:10:03,040 --> 00:10:06,640
Speaker 1: able to divert your product to other markets, you could

179
00:10:06,720 --> 00:10:11,000
Speaker 1: see commodity prices or some commodity prices come under downward

180
00:10:11,000 --> 00:10:14,720
Speaker 1: pressure given the slowdown we're expecting global growth as a

181
00:10:14,760 --> 00:10:17,000
Speaker 1: result of trade wars.

182
00:10:17,360 --> 00:10:21,440
Speaker 2: And so VN. Just finally, what are you looking at next?

183
00:10:21,800 --> 00:10:24,440
Speaker 2: What is what's your focus? I mean, many of these

184
00:10:24,520 --> 00:10:26,880
Speaker 2: countries are still waking up to the reality that this

185
00:10:27,080 --> 00:10:30,400
Speaker 2: is setting in. Should we be paying attention to commodity prices,

186
00:10:30,400 --> 00:10:33,880
Speaker 2: should we be paying attention to currencies or you know what,

187
00:10:33,880 --> 00:10:36,200
Speaker 2: what do you think will really dictate sort of the

188
00:10:36,240 --> 00:10:38,360
Speaker 2: direction of travel here for these economies.

189
00:10:38,960 --> 00:10:41,040
Speaker 1: That's a good question. So right now we're trying to

190
00:10:41,080 --> 00:10:44,040
Speaker 1: look at what it means for GDP growth in these countries.

191
00:10:44,160 --> 00:10:47,200
Speaker 1: So for countries that are exposed in a big way

192
00:10:47,240 --> 00:10:49,640
Speaker 1: to export to the US export markets such as I'll

193
00:10:49,640 --> 00:10:52,440
Speaker 1: give an example of Madagascar which has been also been

194
00:10:52,480 --> 00:10:54,960
Speaker 1: slapped with a high tier for over forty percent, and

195
00:10:55,000 --> 00:10:58,200
Speaker 1: that's for exporting vanilla to the United States and their

196
00:10:58,240 --> 00:11:01,520
Speaker 1: biggest export market is States. So in countries to which

197
00:11:01,520 --> 00:11:05,319
Speaker 1: I heavily expose the US, we are expecting a slowdown

198
00:11:05,520 --> 00:11:08,080
Speaker 1: that's more significant than other economies. So I think that's

199
00:11:08,080 --> 00:11:10,040
Speaker 1: the big thing we're trying to determine which countries will

200
00:11:10,040 --> 00:11:12,760
Speaker 1: be hit harder on the growth front compared to others.

201
00:11:13,240 --> 00:11:15,640
Speaker 1: You mentioned currency is very important points if you're not

202
00:11:15,720 --> 00:11:18,360
Speaker 1: able to get into your export markets or sell as

203
00:11:18,360 --> 00:11:22,240
Speaker 1: many exports, it needs not generating as much foreign exchange

204
00:11:22,320 --> 00:11:25,440
Speaker 1: as you used to. That's particularly important for countries that

205
00:11:25,520 --> 00:11:29,560
Speaker 1: run current account deficits like South Africa, like Kenya, and

206
00:11:29,600 --> 00:11:32,400
Speaker 1: that has implications for the currency. We've already seen the

207
00:11:32,640 --> 00:11:36,160
Speaker 1: rand move weaker on the back of the announcement of

208
00:11:36,160 --> 00:11:38,800
Speaker 1: the tariffs. That's just inn anticipation of what it could

209
00:11:38,840 --> 00:11:42,040
Speaker 1: mean for our external position. But in terms of actually

210
00:11:42,080 --> 00:11:45,640
Speaker 1: seeing what the real implications are, only time will tell,

211
00:11:45,720 --> 00:11:49,160
Speaker 1: and at this stage it is negative for our currencies.

212
00:11:49,480 --> 00:11:53,360
Speaker 2: It's a fast moving story. I always appreciate your insights, Vonne,

213
00:11:53,600 --> 00:11:56,760
Speaker 2: really appreciate you joining us today, and hopefully we'll be

214
00:11:56,800 --> 00:11:58,400
Speaker 2: able to make sense of this at a certain point

215
00:11:58,400 --> 00:12:02,000
Speaker 2: in time. I don't know that. And thanks again so

216
00:12:02,080 --> 00:12:05,600
Speaker 2: much to our Bloomberg Economics Africa economist Ivonne Mango for

217
00:12:05,679 --> 00:12:08,000
Speaker 2: joining us this week. And you can read all of

218
00:12:08,040 --> 00:12:11,839
Speaker 2: our coverage on the US tariffs across Bloomberg platforms now,

219
00:12:12,120 --> 00:12:14,720
Speaker 2: including the Next Africa newsletter. We'll put a link to

220
00:12:14,800 --> 00:12:20,960
Speaker 2: that in the show notes. This program was produced by

221
00:12:21,080 --> 00:12:24,440
Speaker 2: Adrian Bradley. Don't forget to follow and review this show

222
00:12:24,520 --> 00:12:28,760
Speaker 2: wherever you usually get your podcasts. I'm Jennifer's Abisoga. Thanks

223
00:12:28,760 --> 00:12:30,760
Speaker 2: as always for listening. We'll see you next week.