US 10% Tariff: Former Deputy Trade Minister calls for clear policy direction from government

The Trade and Industry Ranking Member, Michael Okyere Baafi, has warned that the introduction of a 10 percent tariff on goods entering the US duty-free could harm the price competitiveness of Ghanaian products in the US market.

In a statement, he explained that products already subjected to standard US port duties might also be impacted if the African Growth and Opportunity Act (AGOA) is affected by this measure.

President Trump took a decision to impose a 10 percent reciprocal tariff on Ghana, citing unfair trade practices in response to the 17 percent average tariffs on US imports.

Under AGOA, qualifying products include textiles and clothing, motor vehicles and parts, agricultural products, chemicals, wine, travel luggage, machinery, and equipment, among others.

The ranking member for trade Michael Okyere Baafi cautioned gains made in the sector would be undermined. “The apparel industry, which employs over 5,000 young people, is particularly vulnerable. Additionally, products like yam and cocoa, which benefit from AGOA preferences, would also be impacted. A 10 percent increase in tariffs could impact segment and negate advance,” he pointed out.

He pointed to the previous government’s emphasis on the African Continental Free Trade Area (AfCFTA) as a response to trade shocks, urging the current government to provide a clear policy direction. “We prioritized the implementation of AfCFTA to diversify export markets and reduce reliance on the US, expanding exports of manufactured products to other African countries. However, we have not seen a clear policy direction from the NDC government,” he said.

Mr Baafi added that how the government responds to this tariff is critical, particularly for exporters in the apparel industry.

The former Deputy Trade and Industry Minister called on the government to prepare to take advantage of trade diversion opportunities resulting from retaliatory measures by major trading partners.

He also urged the development of specialized programs and policies to support exporters who will be affected by the tariffs, including efforts to extend or replace AGOA to maintain preferential access to the US market.

“I advocate for the promotion of value-added exports, as opposed to raw materials, to increase export earnings, improve local consumption, and enhance competitiveness. While a clear policy guidance on exports and the proper funding and implementation of the National AfCFTA Policy Framework and Action Plan is made,” he suggested.

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