Musk, meat and mayhem

Namibia is bracing for a decline in export earnings following the imposition of new US tariffs on its products, a move expected to reduce both sales volumes and demand in the American market.The international relations and trade ministry, in its first formal response to the measures, warned that the situation could also jeopardise broader preferential access for Namibian goods under the Generalised System of Preferences (GSP) regime.Executive director in the ministry, Penda Naanda, said the US tariffs risk creating unfair market conditions, making it more difficult for Namibian products to compete.“In response to the 21% tariffs imposed on Namibian exports to the United States, it is important to clarify that these duties are not based on the Most Favoured Nation (MFN) principle but rather on the US trade deficit with each country divided by the total value of imports from all trading partners,” Naanda explained.“As a result, the implementation of these reciprocal tariffs, as outlined in a White House statement, could override existing trade agreements, including the African Growth and Opportunity Act (AGOA), and significantly disrupt trade flows," he added. Naanda acknowledged that Namibia’s own 42% average tariff on US goods may be a factor, but noted that not all American imports face duties under the Southern African Customs Union (SACU) tariff structure.He added that while the ministry is exploring several strategies to mitigate the impact of the tariffs, details cannot be disclosed at this stage.Naanda further warned that the new tariffs could undermine the competitiveness of Namibian beef and fish in the US market, with higher prices likely to reduce demand. Ultimately, the tariffs may disrupt established supply chains and undermine Namibia’s hard-won access to US markets under GSP.SADC on alertMeanwhile, the Southern African Development Community (SADC) has expressed serious concern following the announcement by the Trump administration on 2 April of sweeping new import tariffs, which are expected to hit SADC economies hard.Effective 5 April, a 10% baseline tariff has been imposed on all imports to the US, with “reciprocal” tariffs – calculated on a country-by-country basis – coming into effect today.These new measures directly challenge the preferential market access that SADC member states have enjoyed under AGOA, which is set to expire in September.Under the new tariff schedule, Lesotho faces the steepest reciprocal tariff at 50%, followed by Madagascar at 47%, Mauritius at 40% and Botswana at 38%. Other affected countries include South Africa, which will face a 31% tariff; Angola, 32%; Namibia, 21%; Zimbabwe and Malawi, both at 18%; Zambia, 17%; Mozambique, 16%; and the Democratic Republic of Congo, 11%. Eswatini, Tanzania, and Comoros each face a 10% tariff.Seychelles is the only SADC member fully exempted from the new tariff regime. Some of the rates, including those applied to Malawi, Botswana and South Africa, reflect adjustments from earlier figures initially announced by US officials.Since these reciprocal tariffs are layered on top of existing duties, they effectively cancel out AGOA’s duty-free benefits for all but Seychelles and Zimbabwe.SADC is currently conducting a comprehensive impact assessment, with findings to be presented at an extraordinary SADC council of ministers meeting in June. Further analysis will be carried out by the Committee of Ministers of Trade (CMT) and the Ministerial Task Force on Regional Integration (MTF), with policy recommendations expected in August.Brown: This is bigger than tradeReacting to Namibia’s 21% tariff, economist recently Rowland Brown told The Agenda that the development is “far from ideal".“We need to think carefully about how to respond. There are both constructive and destructive paths. But to really understand this, we must consider three interconnected themes coming from the US,” Brown said.He cited the following: actions by Elon Musk’s Department of Government Efficiency (DOGE), the evolving geostrategic relevance of global regions, and the re-emergence of tariffs as a policy tool.“Elon Musk is often painted as a mega-villain, which isn’t entirely fair. These budgetary cuts are driven by necessity,” Brown said, highlighting the US$2 trillion budget deficit in that country. “This year, around 18 to 19% of America’s revenue will go towards debt servicing. A few years ago, we warned that Namibia was on a similar path. At that point, a country risks locking itself into a debt trap. What we’re seeing is the US trying to maintain its global posture in an increasingly multipolar world.”Brown added that cutting government spending is no longer optional for the US, with development programmes like USAID among the casualties. This will have a knock-on effect on nations like Namibia that rely on such funding for vital sectors.“People are upset with the US, but the hard question remains: why should the US taxpayer continue footing the bill for antiretrovirals in Namibia?” he asked. - nikanor@nmh-hub.com.na

Musk, meat and mayhem

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Namibian Sun 2025-05-01

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Musk, meat and mayhem

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Namibian Sun 2025-05-01

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