The World's two biggest Economies - U.S and China continued Trade Offensive continues to send shockwaves across the world, even as More African Countries seem to borrow a leaf from the same.
The US dollar weakened on Wednesday when investors reportedly fled American assets because of America’s trade policy tug-of-war with China. The dollar index slipped below the 100 mark, trading near three-year lows, also falling against nearly all Group-of-10 currencies in early London trading.
The dollar fell as much as 0.72% earlier in the day before trimming losses slightly to 0.55%. The decline comes after a brief uptick to 100.2 on Tuesday, its first gain in nearly a week. Investors in the US market have taken exit positions on USD because the West’s economic situation is “uneasy.”
The China and U.S - Trade war fever seems to be catching up across the globe after Tanzania issued a warning.
Tanzania has issued a stern warning to South Africa and Malawi, in an escalating trade dispute has sparked concern within Africa.
Tanzanian Minister of Agriculture Hussein Bashe, in his official statement warned of dire consequences for the duo, if trade barriers against the East African Country's produce are not lifted by next Wednesday.
The ultimatum follows Malawi’s decision to ban imports of Tanzanian goods including flour, rice, ginger, bananas, and maize. South Africa has also maintained restrictions on Tanzanian banana exports despite ongoing negotiations.
Tanzania, is now threatening to block all agricultural imports and transit of goods from the two nations.
Bashe declared: “Hatua hizi ni za kulinda heshima ya nchi yetu, uchumi wa wakulima wetu, na usawa katika biashara za kikanda.” (These measures are to protect the dignity of our country, the economy of our farmers, and fairness in regional trade.)
He added that Tanzania would suspend fertiliser exports to Malawi and has advised local traders to stop all shipments to both countries — including products such as South African apples and oranges.
Bashe indicated that diplomatic avenues had been exhausted. “Tanzania will now act in defence of its national interest and economic sovereignty,” he declared.
The standoff threatens to disrupt regional supply chains and further strain relations, prompting calls for urgent mediation to prevent an all-out trade fallout, with the Samia Suluhu-led government on a trade-tariffs offensive run.
Tanzania seems to be on a offensive trend, after it recently imposed new protectionist taxes on Kenyan exports including eggs, dairy products, meat items, and confectionery, threatening to reignite trade tensions between the East African neighbors and violating the East African Community (EAC) Customs Union Protocol.
The Kenya Association of Manufacturers (KAM) reports that Tanzania is charging discriminatory levies that make Kenyan products significantly more expensive than their domestic equivalents, including a Tanzanian shilling (Tsh) 1,000 (approximately Ksh50) per kilogram sugar levy on Kenyan confectionery that doesn't apply to locally-made products.
These trade barriers have contributed to a Sh4.2 billion decline in Kenya's export earnings from Tanzania in 2024, with total domestic exports falling 7.36 percent to Sh51.84 billion from Sh55.96 billion the previous year—marking the first such decline since 2017, excluding the COVID-affected year of 2020.
The situation is particularly concerning as it contradicts the EAC Customs Union Protocol signed in 2005, which allows free movement of goods, services, capital, and labor within the seven-nation bloc with zero duty on domestic products.
This latest dispute adds to a history of trade frictions between the two countries, including Kenya's temporary 2% levy on Tanzanian cereals and legumes last August and Tanzania's February 2024 suspension of tea import permits for Kenyan traders.
More broadly, Kenya's annual earnings from exports to African countries dropped for the first time in six years in 2024, declining by 1.94 percent to Sh421.34 billion, partly due to the strengthening Kenyan shilling affecting export competitiveness.
