Ghana-US Trade Relations: Dr. Theo Acheampong Warns Government Against Retaliatory Tariffs on US Imports
Petroleum Economist and Political Risk Analyst, Dr Theo Acheampong, has cautioned Ghana against applying retroactive tariffs to US-imported products in view of the 10% export tariff slapped on the country by President Donald Trump.
Such a move by the Government, Dr Acheampong notes, will only result in “cost-passthroughs” that will mostly be felt by Ghanaian consumers, increasing already high inflationary pressures that the Central Bank of Ghana is struggling to control.
“Should Ghana also respond by applying/increasing retroactive tariffs to US-imported products? 𝗣𝗿𝗼𝗯𝗮𝗯𝗹𝘆 𝗻𝗼𝘁! 𝗪𝗵𝘆? 𝗧𝗵𝗲 𝗰𝗼𝘀𝘁 𝗽𝗮𝘀𝘀-𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘄𝗶𝗹𝗹 𝗺𝗼𝘀𝘁𝗹𝘆 𝗯𝗲 𝗳𝗲𝗹𝘁 𝗯𝘆 𝗚𝗵𝗮𝗻𝗮𝗶𝗮𝗻 𝗰𝗼𝗻𝘀𝘂𝗺𝗲𝗿𝘀, increasing already high inflationary pressures that the central bank is struggling to control,” he noted.
“This is not to say we shouldn’t worry as Ghana will feel the second round of inflationary cost pass-through, not because of imports and exports with the US but in other countries like China and others, whose input costs may rise and will be felt by all economies, including Ghana. There are major external headwinds,” he added.
Ghana’s duty-free access to the US market under the African Growth and Opportunity Act (AGOA) has been abruptly terminated with a 10% tariff imposition on exports to the US market, marking a significant blow to the country’s export sector.
The move comes as part of Washington’s newly announced reciprocal tariff measures, which have also affected several major economies, including China, Vietnam, the European Union, and even Israel.
According to Dr Acheampong, 𝗨.𝗦. 𝗴𝗼𝗼𝗱𝘀 𝘁𝗿𝗮𝗱𝗲 𝘄𝗶𝘁𝗵 𝗚𝗵𝗮𝗻𝗮 𝘄𝗮𝘀 $𝟮.𝟭 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 𝗶𝗻 𝟮𝟬𝟮𝟰. This breaks down as $967 million of goods exports to Ghana and $1.2 billion of imports (a decrease from 2023 levels), the resulting trade deficit for Ghana was $204 million.
𝗨𝗦–𝗚𝗵𝗮𝗻𝗮 𝘁𝗿𝗮𝗱𝗲 𝗺𝗮𝗸𝗲𝘀 𝘂𝗽 𝗿𝗼𝘂𝗴𝗵𝗹𝘆 𝟲% 𝗼𝗳 𝗚𝗵𝗮𝗻𝗮’𝘀 𝘁𝗼𝘁𝗮𝗹 𝗳𝗼𝗿𝗲𝗶𝗴𝗻 𝘁𝗿𝗮𝗱𝗲 𝗼𝗻 𝘁𝗵𝗲 𝗶𝗺𝗽𝗼𝗿𝘁 𝘀𝗶𝗱𝗲. In contrast, 𝗖𝗵𝗶𝗻𝗮-𝗚𝗵𝗮𝗻𝗮 𝘁𝗿𝗮𝗱𝗲 𝗶𝘀 𝟭𝟯% 𝗮𝗻𝗱 𝟭𝟴% 𝗼𝗻 𝘁𝗵𝗲 𝗲𝘅𝗽𝗼𝗿𝘁 𝗮𝗻𝗱 𝗶𝗺𝗽𝗼𝗿𝘁 𝘀𝗶𝗱𝗲, respectively.
𝗘𝘅𝗽𝗼𝗿𝘁𝘀 from Ghana to the United States (2023) were primarily crude petroleum (71%), cocoa beans and cocoa paste (13%). 𝗜𝗺𝗽𝗼𝗿𝘁𝘀 comprised largely cars (25%), and refined and crude petroleum (23%).
“𝗧𝗮𝗿𝗶𝗳𝗳𝘀 𝗺𝗮𝘆 𝗹𝗶𝗸𝗲𝗹𝘆 𝗮𝗳𝗳𝗲𝗰𝘁 𝗰𝗼𝗰𝗼𝗮 𝗽𝗿𝗼𝗱𝘂𝗰𝘁𝘀, 𝗶𝗻𝗰𝗹𝘂𝗱𝗶𝗻𝗴 𝗯𝗲𝗮𝗻𝘀. However, given the complex value chain dynamics around how they are traded, I don’t see this significantly affecting petroleum products,” he added.
