China scraps tariffs for all but one African nation

An important development from the financial markets: China scraps tariffs for all but one African nation 12 minutes ago Share Save Add as preferred on Google Kelly Ng Getty Images Sino-African trade is marked by a growing imbalance in China's favour China will scrap tariffs for all African countries from Friday – except Eswatini, which maintains ties with Taiwan. As of December 2024, China had already implemented a duty-free policy for 33 least-developed African nations. The policy now covers 53 countries, and will be in place until 30 April 2028.

It is unclear what will happen after that. Beijing has boasted that it is the first major economy to offer unilateral zero-tariff treatment to Africa. But analysts say that while China is seizing the chance to enhance its soft power, they point out that tariffs are rarely the main obstacle for exporters in Africa which has a huge trade deficit with China.

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A huge imbalance "China is positioning itself as the trade liberaliser and Africa-friendly economic partner, in contrast to Donald Trump and the US," says Lauren Johnston, a senior research fellow at the AustChina Institute. The US had hit some African nations with tariffs of up to 30% in August, although most are now subject to a 10% tariff, after the US Supreme Court struck down many of the duties. The expansion of China's zero-tariff regime could increase African agricultural exports, which will "help to elevate rural incomes, improve rural productivity, and ultimately to reduce hunger and poverty", Johnston says.

But Sino-African trade is marked by a growing imbalance in China's favour, which means Chinese exports to Africa far exceed African exports to China, and that difference is widening. Last year, Africa's trade deficit with China rose by 65% to about $102bn. Africa's exports to China are dominated by minerals and raw materials, such as crude oil and metallic ores.

Currently, China's main trading partners in the region include Angola, driven primarily by oil, the Democratic Republic of Congo, and South Africa. However, a consistent duty-free regime across such a heterogenous continent could result in uneven gains, Johnston notes. More developed, industrialised economies like South Africa and Morocco will be better positioned to expand exports, she says.

On its own, the zero-tariff policy does not address continent-wide needs for economic restructuring and infrastructure upgrading, adds Jervin Naidoo, a political analyst at Oxford Economics Africa. "Many African economies still face structural constraints, such as limited industrial capacity, weak logistics, and a reliance on raw commodity exports, which tariff reductions alone cannot address," he says. Getty Images Africa's exports to China are dominated by raw materials, such as cobalt, seen here in a factory in the Democratic Republic of Congo Alfred Schipke, director of the East Asian Institute in Singapore, agrees that short-term economic impact "will likely be modest and concentrated in African countries that already have export capacity".

Financial markets are tracking the development closely as investors assess the likely impact.