Trump hits Botswana with tariffs in global trade slap
Mbongeni Mguni - Lewanika Timothy | Tuesday April 8, 2025 11:45
By Press time yesterday, local trade officials were scrambling to understand the nuances of the tariffs and a possible response. Trade and Industry minister, Tiroeaone Ntsima, received but was yet to respond to Mmegi enquiries seeking to understand how Botswana could be affected by the US decision.
De Beers officials were equally studying the situation. Together with the government, De Beers is responsible for the country’s single most exposed commodity to US tariffs – diamonds.
“Regarding your questions on tariffs, following yesterday's announcement, we are in the process of assessing the potential impacts of tariffs and will engage with our partners and stakeholders to consider the most appropriate way forward,” a De Beers spokesperson, David Johnson, told Mmegi.
Late Wednesday, Trump addressed a globally televised news conference where one-by-one he announced new tariffs on nearly all countries, in what he said was a reciprocal move to correct trade imbalances suffered by the US. Some of the countries hit with tariffs are uninhabited islands in remote parts of the oceans.
The tariffs imposed on Botswana are the third highest on any African country with Lesotho being hardest hit at 49%, then 40% for Mauritius, 37% for Botswana and 30% for South Africa.
Botswana enjoys a trade surplus with the US, meaning that it sells more to that country than it purchases. According to the International Trade Centre, which collects figures from local data agencies and the United Nations, in 2023, Botswana had a trade surplus of $26.7 million (about P370m at current rates) over the US.
In that year, Botswana exported $111.8 million worth of goods to the US, while importing $85.2 million. While much of the trade between Botswana and the US consists of diamonds, Botswana also imports different chemicals, machinery, and pharmaceutical products from the larger economy. The US’ imports from Botswana outside diamonds are very limited.
In his calculations, Trump estimated that Botswana imposes 74% tariffs on US imports, a figure that local officials reportedly dispute. Other countries affected by the tariffs have similarly dismissed the US’ calculations, the formula ultimately used, and the entire move to impose the charges without dialogue.
The tariffs on African goods, in particular, run against the duty and quota-free provisions of the African Growth and Opportunities Act (AGOA). The main trade instrument between the US and Africa, first introduced in 2000, is specifically designed to be non-reciprocal, as it seeks to lift African nations to the level of partnering with the US in trade and economic growth. AGOA expires in September and while African states have been pushing for a renewal, the latest development suggest US lawmakers may balk.
First National Bank Botswana chief economist, Gomolemo Basele, who last month presented research highlighting some of the risks of the US trade and foreign policy to Africa, provided Mmegi with detailed written responses to enquiries yesterday afternoon:
Mmegi: From your insights, what tariff rate is the US seeking to impose on Botswana and what tariff rate does Botswana currently have on imports from the US? BASELE: According to a White House briefing, President Trump shared a list of reciprocal tariffs, which showed that the US is looking to impose a 37% tariff on Botswana's exports to the US. Currently, Botswana applies tariffs ranging from 0% - 20% on machinery imported from the US. This includes delivery trucks (up to 20%), large construction vehicles (up to 20%), aircraft parts (including unmanned aircraft) (0% - 5%), and excavation machinery (0% - 10%).
Mmegi: Please explain how Botswana's tariffs on goods from the US relate to SACU's Common External Tariff i.e is Botswana's tariff on US goods not in line with SACU's Common External Tariff? BASELE: Botswana's tariffs on goods from the US are broadly in-line with SACU's Common External Tariff. Looking at the US reciprocal tariff list, SACU member states have broadly similar tariffs applied to their exports to the US. These tariffs range between 20% and 38% with some of this variation being possibly due to a premium levied by the US for what they consider to be currency manipulation and trade barriers being implemented by some countries. Lesotho stands as an outlier, with a much higher tariff being applied to the country by the US.
Mmegi: How would Botswana's diamonds be treated in the event that US plans on tariffs to Botswana are implemented? BASELE: Prior to this pronouncement, Botswana's diamond exports to the US, which also fall on the US' critical goods list (precious stones), were not subject to any tariffs. Given this change, diamond exports to the US will be taxed at 37% thus making them more expensive for the US consumer.
Exports to the US, however, account for a small portion of Botswana's total exports (1.45% on average since 2020) as well as diamond exports (averaging 1.54% since 2020). This points to the possibility that the direct impact of this development could be limited in terms of determining Botswana's total diamond exports.
Mmegi: What is your comment on the view that with the global tariffs and in particular, their clear reciprocal nature, the African Growth Opportunities Act is effectively nullified? AGOA was designed specifically as a non-reciprocal agreement for duty and quota free access over certain lines of goods? BASELE: The direction of global tariffs does present headwinds for AGOA. Given the increasingly protectionist stance that the US is taking it is likely that AGOA will receive significant revision, reducing the benefit for African countries, and possibly even be scrapped by the US when it comes up for review later this year. On the Botswana front, exports under the AGOA have been negligible, which will limit any disruption to economic activity and exports if AGOA is revised or scrapped.