Condia Insider: The ripple effects of Trump’s tariff play

🍔 Quick Bite: Trump’s new tariffs could trigger investor pullback, FX instability, and slower growth for African tech. It’s a wake-up call to reduce dependence on external markets and attempt to build regional resilience.

🧠 The Breakdown

Earlier this month, Donald Trump announced a sweeping new wave of tariffs as part of his renewed “America First” strategy. A percentage country-specific tariff on imports into the United States, with China singled out for an even steeper 125 percent duty. Days later, China fired back, raising its own tariffs on US goods to match.

What followed was a chaotic few days of policy reversals and economic posturing. Last Wednesday, the same day the tariffs were to take effect, Trump paused most of the country-specific duties for 90 days, leaving only the universal 10 percent tariff active for now. 

The ripple effects from the world’s largest economy are already making their way across borders. And for a continent like Africa, still fighting to recover from a funding winter, any hit to trade, investment, or macroeconomic stability is bad news.

Non-oil exports under pressure

One of the clearest channels of impact is Nigeria’s non-oil export sector. Under the African Growth and Opportunity Act (AGOA), Nigerian businesses have enjoyed duty-free access to the US market, allowing sectors like agriculture and light manufacturing to thrive without being undercut by trade barriers.

According to the National Bureau of Statistics, non-oil exports from Nigeria jumped from ₦86.4 billion ($54.9 million) in 2023 to ₦309.1 billion ($196.6 million) in 2024. That kind of growth depends on favourable trade terms and currency stability, both of which are now under threat.

If Trump follows through with his tariffs after the 90-day pause, the cost of exporting to the US could rise significantly. That would not only reduce trade volumes but also slash foreign exchange earnings, at a time when the likes of the naira, Kenyan shilling, and Ghanaian cedi are already under pressure. As dollar liquidity tightens, African countries could face a fresh round of currency instability, leading to imported inflation and increased cost of operations for startups.

For tech-enabled sectors like agri-tech, export logistics, and e-commerce platforms dealing with international suppliers, this creates a high-stakes challenge. Higher prices and slower cross-border trade could make digital platforms less competitive or force them to shift focus away from global markets entirely.

Investors may pull back, again

March 2025 marked one of the lowest months of venture funding into African startups since the COVID-19 era. And with global markets on edge, things may get worse before they get better.

The return of Trump’s protectionist agenda introduces new uncertainty into the global economy, encouraging investors to reallocate capital to safer assets. US treasury bills, for instance, have seen increased demand in recent months as a hedge against volatility. For African startups that still rely heavily on capital from US and European VC firms, this means longer fundraising cycles and tougher due diligence requirements.

Startups in their early stages, especially those without strong local revenue or profit margins, could find themselves squeezed out of the investor pipeline. This is particularly concerning for a continent where startup capital plays an outsized role in job creation, innovation, and digital inclusion.

The “wait and see” approach by investors may already be happening quietly. But if tariffs go into full effect and trigger a broader global slowdown, African tech will not be spared.

Sector-specific stress points

While the telecommunications sector is not directly targeted by tariffs, it remains exposed to the consequences. Most network infrastructure in Nigeria is imported from the US, China, or Europe. That includes cables, routers, base stations, and more.

Even if tariffs do not apply to these products, indirect effects could still hurt. For example, exchange rate instability will raise the cost of importing equipment, while inflation may weaken consumer purchasing power. Both scenarios create pressure for telecom operators who need to expand coverage and maintain affordability at the same time.

Other sectors at risk include fintech, where international partnerships and dollar-denominated services are common, and clean energy startups that rely on imported solar components. Healthtech companies using imported diagnostics or medical hardware may also find themselves caught in the crossfire.

A digital economy built on fragile foundations

One of the subtler risks is how much of Africa’s digital economy is entangled with global supply chains and policy decisions beyond its control. The Trump tariffs are a reminder that local innovation is still tethered to external forces, from trade wars to currency shocks to regulatory shifts in Silicon Valley.

Even the exemptions granted by the US for smartphones, laptops, and memory chips, which are currently off the tariff list, are temporary. According to statements from US commerce officials, these products may be lumped in with broader electronics duties in the coming months. If that happens, consumer electronics prices could surge, affecting not just businesses but also everyday users who depend on affordable devices for digital access.

What next?

In many ways, this is yet another reminder of how vulnerable Africa’s digital economy is to external shocks. But the bigger concern here is not just the immediate policy decision, but what it signals.

If President Trump implements country-specific tariffs, African governments will need to respond quickly. This could involve strengthening digital trade policies, introducing more startup-friendly regulations, and implementing smarter macroeconomic safeguards. Some European countries have already responded by negotiating with the US. However, most African nations may not have the economic leverage needed to secure meaningful concessions.

There is also an opportunity, albeit a hard one, to strengthen regional trade within Africa and build more resilience into local tech ecosystems, instead of depending so heavily on US markets, investors, and supply chains.

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