2025: A Year of Trade Tensions and Unequal Gains

By Mary Alorh

The year 2025 will likely be remembered as a pivotal moment in global trade, marked by escalating trade wars and the strategic use of tariffs. While some nations emerged stronger from this turbulent landscape, others experienced significant economic setbacks.

Tariffs continue to play a central role in shaping international commerce, influencing trade flows and economic policies across borders. Against this backdrop, China’s recent decision to impose zero tariffs on all goods imported from Ghana represents a promising opportunity for the West African nation’s economy.

However, history suggests that unilateral tariff reductions often yield limited or uneven economic benefits for individual countries. Despite initiatives like the African Growth and Opportunity Act (AGOA), many African nations have struggled to fully capitalize on preferential trade arrangements.

The Hidden Barriers to African Trade

One major obstacle preventing Africa from realizing its full potential in global markets lies in the complex web of standardization requirements that exporters must meet – particularly when attempting to export semi-processed goods. These regulations, while ostensibly technical, often function as artificial barriers, effectively locking African economies into the role of raw material suppliers rather than value-added producers.

Take Ghana, for example. While exporting raw cocoa beans to Europe is relatively straightforward, exporting semi-processed cocoa requires navigating a maze of restrictive standards.

This limits the country’s ability to capture greater value from one of its most important agricultural commodities – even though processing could significantly boost revenue.

Compounding these challenges, many African nations no longer maintain full control over their natural resources. In countries like Ghana, critical resources have been pledged – sometimes for decades – in exchange for infrastructure development under programs such as China’s Belt and Road Initiative (BRI).

In some cases, governments have taken on long-term debt obligations tied to future commodity exports. The current administration in Ghana, for instance, is now seeking to renegotiate several agreements signed by its predecessor, particularly those involving the Ghana Cocoa Board – the country’s primary licensed buyer of cocoa.

Restructuring for Real Economic Gain

Under previous arrangements, loans were secured against future cocoa harvests, raising concerns about long-term economic sovereignty and fiscal flexibility.

To truly benefit from initiatives like zero-tariff agreements, African countries must first confront internal structural barriers. Chief among these are the regulatory and standardization hurdles that stifle the export of processed and semi-finished goods – products that hold far greater revenue-generating potential than raw materials alone.

Only by addressing these systemic constraints can Africa transform its trade relationships and move toward a more equitable and prosperous position in the global economy.

Mary Alorh is Director of Administration at DefSEC Analytics Africa Ltd., and is an expert in Gender, Youth, and Peace & Security initiatives in West Africa.