The escalating trade war between the United States and China is generating significant concerns about its potential impact on the global economy, particularly for import-dependent nations like Nigeria. Experts warn of substantial disruptions to trade, potential economic downturns, and the urgent need for African countries to prioritize intra-continental trade and reduce reliance on external borrowing.

Prof. Ken Ife, a global trade analyst, highlighted the aggressive nature of the trade war, noting that China has raised tariffs to 85%, while the U.S. has further increased tariffs to 125%. He cautioned that this tit-for-tat escalation could lead to a drastic reduction in trade between the two economic giants, potentially plummeting by as much as 90%, according to preliminary estimates from the World Trade Organization (WTO). The repercussions of such a meltdown would be felt worldwide, disproportionately affecting African economies like Nigeria, which heavily rely on imports.

Echoing these concerns, WTO Director-General Ngozi Okonjo-Iweala stated that the U.S.-China trade war could reduce global gross domestic product (GDP) by seven per cent. She pointed out that the escalating trade tensions between the two countries pose a significant risk of a sharp contraction in bilateral trade, potentially decreasing by up to 80%. Okonjo-Iweala emphasized that the negative macroeconomic effects would not be confined to the U.S. and China but would extend to other economies, especially the least developed nations. She also warned of the potential fragmentation of global trade along geopolitical lines, which could lead to a long-term reduction in global real GDP.

In light of these challenges, Prof. Ife advocated for a shift in trade priorities, urging African countries to focus on intra-African trade as a sustainable solution. He suggested that 80 to 90% of whatever any African country wants to import abroad can be sourced within Africa. He also emphasized the need for African countries to reduce excessive borrowing to finance imports, as this practice is not sustainable. Prof. Ife stressed the urgency for Nigeria to take proactive measures to strengthen intra-African trade and boost regional economic growth, given its import-dependent economy.

Okonjo-Iweala urged all WTO members to address the challenges posed by the trade war through cooperation and dialogue, emphasizing that trade diversion remains an immediate and pressing threat that requires a coordinated global response. The ongoing trade war and its potential consequences underscore the importance of diversifying trade relationships and fostering regional economic integration to mitigate the adverse effects on vulnerable economies.