When Elephants Fight: How Trump’s Trade War May Trample Ghana

When the mighty elephants of global trade, America, the European Union, and China, begin their stampede, it is the grass that suffers most. And in this case, the grass is Ghana. While Donald Trump’s latest expansion of his trade war may not have Ghana in its direct line of fire, we may still catch some stray bullets.

The former, but now U.S. president, never one to miss a battle, has now widened his economic war beyond tariffs. His new battleground? Global taxation and regulation. He is aiming at the big boys, the EU, India, Japan, but as history has taught us, when the giants wrestle, even the bystanders take a few punches.

Now, how does this affect our dear Ghana? 

Let’s start with the price of basic goods. We import everything from machines to mobile phones, from tractors to toothpaste. If Trump’s policies throw the global supply chain into chaos, the price of imports will rise. That “small top-up” you give the shopkeeper for your favourite beverage? It may soon become a full-blown price hike. And don’t ask about second-hand cars. If global tariffs make vehicles more expensive, the phrase “Boss, make I reduce small” will disappear from the vocabulary of car dealers.

Then there’s our export headache. Ghana, as you well know, is built on gold, cocoa, and oil. If Trump’s trade war causes economic slowdowns in other parts of the world, who will buy our cocoa at the price we want? Who will purchase our oil if industries overseas start cutting costs? The price of gold may dance a little, but if trade disputes shake investor confidence, our forex earnings could shrink, and the Bank of Ghana will be sweating bullets to keep the cedi stable.

And then there’s AGOA, that lovely trade agreement that allows some of our goods to enter America duty-free. If Trump continues his “America First” mantra, what guarantees do we have that this door will remain open? If we lose access, those hardworking Ghanaian textile producers who supply the U.S. market may have to turn their colourful fabrics into bedsheets for the local market.

What about foreign investors? They love stability more than a toddler loves a lollipop. If Trump’s war drags on and economies become unpredictable, Ghana might no longer look like the promising investment destination we want it to be. That big project you’ve been hoping will come to Ghana? It might land somewhere else instead. Meanwhile, the cedi, already limping, may catch a full-blown fever if foreign investors start pulling out their dollars.

Trump’s Global Showdown: The Bigger Picture

So, what is Trump up to? In simple terms, he is demanding payback. If the EU or any country places tariffs or taxes on American products, he wants the U.S. to do the same. He calls it “reciprocal tariffs”, a fancy way of saying “If you slap me, I slap you back”. The targets? The EU’s value-added tax (VAT) and digital service taxes on U.S. tech companies.

Commerce Secretary-Designate Howard Lutnick has echoed the battle cry: “If they tax us, we tax them.” The administration has given the world an April 1 deadline to adjust, or else the tariff hammer will fall.

Now, in America, they are saying this will protect their industries and create jobs. But elsewhere, the story is different. Economists are warning that retaliation will follow, trade wars will intensify, and global supply chains will suffer. Already, the EU is fuming, India is weighing its options, and Japan is considering its next move. The big boys are gearing up for a fight, and the rest of us just hope not to get crushed in the middle.

What Ghana Must Do to Stay Afloat

But as my grandmother always said, “If you see two elders fighting, don’t stand too close unless you want a stray slap.” Ghana must start taking steps to protect itself.

First, we must expand our trade partnerships beyond the usual suspects. Why rely so much on the U.S. and EU when Asia and Africa are promising markets? The African Continental Free Trade Area (AfCFTA) is waiting for us to take advantage of it.

Second, let us wake up and start producing more locally. We have been talking about industrialization since the days of Kwame Nkrumah, but if prices of imports start climbing, the conversation may soon turn into a national emergency. It is time to make “Made in Ghana” more than just a catchy slogan.

Finally, our economic managers must watch the cedi like a hawk. If global economic shocks cause investors to withdraw their money, we may see some serious exchange rate gymnastics. The Bank of Ghana must be ready with the right policies to prevent a repeat of past currency crises.

The Calm Before the Storm?

Trump’s latest move may seem far away, but we would be foolish to ignore the tremors. Whether or not his policy succeeds, whether or not the world retaliates, Ghana must prepare for rising prices, uncertain exports, and volatile investment flows.

This is not a time to sit back and wait. This is a time for action, innovation, and smart economic planning. Otherwise, we will wake up one day, look at the prices of imported goods, and ask ourselves “Na who send me?”