Trump’s Iran Trade Tariffs Threaten to Destabilize African Economies Already Facing US Trade Pressure

President Donald Trump’s sweeping announcement of a 25 percent tariff on any country conducting business with Iran has sent shockwaves through African capitals, where governments are now scrambling to assess the potential economic fallout from a policy that threatens to compound already mounting trade pressures from Washington. The tariff announcement, delivered via Trump’s Truth Social platform on January 12 with the declaration that it was “effective immediately” and “final and conclusive,” represents an unprecedented attempt to use American economic leverage to isolate Tehran amid violent domestic unrest that has reportedly claimed thousands of lives.

For several African nations including Nigeria, South Africa, Kenya, Ghana, Tanzania, and Somalia—all of which maintain varying degrees of commercial relationships with Iran—the new tariff comes at a particularly inopportune moment. These countries are already navigating a complex web of US trade restrictions, including Trump’s controversial “reciprocal” tariff regime that has imposed duties ranging from 10 to 30 percent on African exports, and are simultaneously facing uncertainty around the future of the African Growth and Opportunity Act, which expired in September 2025 before the House of Representatives approved a three-year extension.

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Iran’s Economic Crisis Fuels Unprecedented Unrest

The context for Trump’s tariff announcement is Iran’s deepening internal crisis, which has evolved from economic protests into what observers describe as the most significant challenge to the Islamic Republic since the 1979 revolution. Beginning on December 28, 2025, demonstrations erupted across Iranian cities after the rial currency plummeted to 1.42 million against the US dollar—a staggering 56 percent drop in value within just six months—driving food prices up by an average of 72 percent compared to the previous year.

What started as shopkeepers in Tehran’s historic Grand Bazaar shuttering their businesses to protest the economic devastation has metastasized into a nationwide movement demanding regime change. Iranian authorities have responded with brutal force, with death toll estimates varying widely but all pointing to catastrophic levels of violence. While initial reports from the US-based Human Rights Activists News Agency cited more than 500 deaths as of January 11, subsequent investigations have painted a far grimmer picture. By January 13, multiple sources reported that at least 12,000 and possibly as many as 20,000 people had been killed in what some human rights organizations are characterizing as massacres constituting crimes against humanity.

The Iranian government imposed near-total internet and telecommunications blackouts beginning January 8, severely limiting the flow of information from inside the country and making independent verification of casualty figures extremely difficult. Iran has even deployed military-grade jammers to disrupt Starlink satellite internet signals, initially affecting 30 percent of media traffic before rising to 80 percent, though activists report that free Starlink subscriptions have helped circumvent some government restrictions.

Trump has explicitly linked his economic pressure campaign to the protest crackdown, warning Iran that if authorities “violently kills peaceful protesters,” the United States would “come to their rescue,” echoing threats of potential military intervention just months after US airstrikes on Iranian nuclear facilities during a 12-day war launched by Israel against the Islamic Republic in June 2025.

The Scope and Mechanics of the Iran Tariff Policy

The tariff announcement itself has raised numerous questions about implementation, enforcement, and legal authority—questions that the White House has so far declined to answer in any detail. Trump’s Truth Social post provided no specifics about what constitutes “doing business” with Iran, whether the tariffs would apply to services as well as goods, how they would be calculated, or under what legal framework they would be imposed.

The lack of clarity has created immediate uncertainty for global trading partners. For African countries, the critical question is whether any level of commercial engagement with Iran—no matter how modest—would trigger the full 25 percent penalty on all exports to the United States. This is particularly concerning given that Iran has been actively expanding its commercial footprint across Africa in recent years, establishing trade centers in Kenya, Uganda, Tanzania, Ghana, Nigeria, and South Africa among other countries.

According to Iran’s Trade Promotion Organization, the country’s exports to African nations reached $849 million between March and November 2025, representing a 77 percent increase year-on-year. Tanzania has emerged as one of Iran’s top export destinations, alongside Kenya, Ghana, South Africa, Nigeria, and Somalia. Nigeria alone, as Iran’s third-largest African trading partner, conducts approximately $125 million in annual trade, exporting agricultural goods including oily seeds, cocoa, and spices while importing cranes, plastics, gaskets, and processed foods.

The proposed tariff would stack on top of existing US trade measures already affecting African exporters. Under Trump’s “reciprocal” tariff policy implemented in April 2025, African countries already face elevated baseline duties. South Africa confronts tariffs of up to 30 percent on selected goods, Nigeria faces approximately 14-15 percent, Ghana between 10-15 percent, while Kenya and Tanzania are subject to around 10 percent. For countries continuing to trade with Iran, the new measure would add an additional 25 percent levy on all US-bound exports, potentially making their products completely uncompetitive in American markets.

China and Major Trading Partners Push Back

The tariff threat has drawn sharp criticism from China, Iran’s most significant trading partner. Chinese Ministry of Foreign Affairs spokeswoman Mao Ning told reporters that “there are no winners in a tariff war” and that China would “resolutely safeguard its legitimate rights and interests.” According to Chinese customs data, in the first 11 months of 2025, China exported $6.2 billion worth of goods to Iran and imported $2.85 billion—before accounting for oil purchases, which China doesn’t publicly disclose. Analysts estimate that China has accounted for more than 90 percent of Iran’s oil trade in recent years, imported through intermediaries.

The new tariff could mean a minimum 45 percent combined tariff rate on goods from China, compared to the current 20 percent rate, potentially reigniting the trade war between Washington and Beijing that roiled global markets when Trump raised tariffs on Chinese goods to a peak of 145 percent before lengthy negotiations brought rates down. Other major economies with substantial Iran trade ties include Turkey, where bilateral trade was worth approximately $5.7 billion in 2024 according to UN Comtrade data, as well as India, the United Arab Emirates, Brazil, and Russia.

The African Context: Compounding Trade Vulnerabilities

For African nations, the Iran tariff announcement represents yet another layer of trade complexity in what has already become an extraordinarily challenging environment for exporters seeking to access the lucrative US market. The timing could hardly be worse, coming as it does amid broader uncertainties about America’s trade relationship with the continent.

The African Growth and Opportunity Act, which has been the cornerstone of US-Africa trade policy since 2000, expired on September 30, 2025, creating a brief period of limbo for African exporters who had depended on duty-free access to the US market for over 6,500 products. While the House of Representatives approved a three-year extension through December 2028 by a vote of 340 to 54 on January 12, the bill still requires Senate approval and President Trump’s signature before the preferences are formally restored.

Even with AGOA’s likely renewal, the program faces mounting challenges. Annual eligibility reviews conducted by the White House can result in countries being removed for failing to meet requirements related to rule of law, human rights standards, and market-based economic policies. This creates ongoing vulnerability for African nations, particularly given the Trump administration’s willingness to use trade policy as a tool for advancing broader foreign policy objectives.

In 2024, US imports under AGOA totaled approximately $8 billion, with top imports including crude oil ($2 billion), apparel ($1.1 billion), and agriculture (over $900 million). The leading AGOA exporters were South Africa ($14.0 billion in total US exports), Nigeria ($5.7 billion), Ghana ($1.7 billion), Angola ($1.2 billion), and Côte d’Ivoire ($948 million). For many of these countries, the potential addition of a 25 percent Iran-related tariff on top of existing duties could effectively price their exports out of the American market.

Sectoral and Country-Specific Impacts

The impact of combining Iran-related tariffs with existing trade barriers varies considerably across African countries and sectors. South Africa, despite having limited direct trade with Iran, faces particularly acute vulnerabilities. The country already confronts 30 percent “reciprocal” tariffs on key exports including citrus, steel, and wine. Adding a 25 percent Iran-related levy could devastate sectors like automotive manufacturing and mining, reducing competitiveness in what is one of South Africa’s largest export markets.

In 2024, South Africa exported approximately $8.2 billion in goods to the United States and imported about $6.97 billion, resulting in a trade surplus of roughly $1.23 billion. The automotive sector, which has benefited significantly from AGOA preferences, faces particular exposure. US trade representative Jamieson Greer has described South Africa as a “unique problem” for US trade officials, citing what he characterized as failure to respond adequately to American proposals and maintenance of restrictive trade practices. Greer indicated he was “happy to consider” removing South Africa from AGOA altogether, raising the specter of complete loss of preferential access regardless of the Iran tariff question.

Nigeria, with its approximately $125 million in annual trade with Iran, faces a difficult calculus. While the United States is an important market for Nigerian exports, particularly agricultural products and oil, the country has been developing its commercial relationships across a diversified set of partners including China, India, and Middle Eastern states. The Iran trade represents a relatively small portion of Nigeria’s overall export portfolio, but completely severing those ties to avoid US tariffs would have political and economic implications given Iran’s growing presence across Africa.

Kenya’s situation illustrates the complexity African nations face in navigating these competing pressures. The country is a major exporter of apparel to the United States and has been actively pursuing a bilateral free trade agreement with Washington. Kenya also participates in Iran’s African trade network, with commercial ties that could potentially trigger the new tariff. However, Kenya’s 10 percent baseline tariff from the reciprocal tariff regime is lower than some regional competitors, potentially providing some relative advantage if the Iran measure forces a reshuffling of African export patterns.

Tanzania has emerged as one of Iran’s top export destinations in Africa, which could place the East African nation in a particularly vulnerable position. The country’s participation in the African Continental Free Trade Area and efforts to develop regional value chains may provide some buffer, but loss of preferential access to the US market would still represent a significant setback for Tanzanian exporters.

Ghana, facing baseline US tariffs of 10-15 percent, similarly maintains commercial ties with Iran that could trigger the additional 25 percent levy. The cumulative effect of 35-40 percent total tariffs would make Ghanaian exports largely uncompetitive in the American market, with particular impacts on agricultural products, textiles, and other manufacturing goods that have been developing under AGOA preferences.

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The Broader Geopolitical and Economic Context

The Iran tariff announcement must be understood within the broader trajectory of Trump’s trade policy, which has consistently emphasized the use of tariffs as both an economic and foreign policy tool. The administration has characterized tariffs as the “most beautiful word in the dictionary” and has wielded them liberally to advance various objectives ranging from reducing trade deficits to pressuring foreign governments on immigration, drug trafficking, and now foreign policy alignment.

The legal foundation for many of Trump’s most expansive tariffs remains contested, with a much-anticipated Supreme Court ruling pending on whether duties invoked using the International Emergency Economic Powers Act—including the controversial “reciprocal” tariffs and measures related to purported fentanyl trafficking—are constitutional. It remains unclear whether the newly unveiled Iran-related tariffs also rest on IEEPA authority or some other legal framework, adding another layer of uncertainty to an already opaque policy.

For Africa, the proliferation of trade barriers from the United States comes at a time when the continent is working to deepen intra-regional commerce through the African Continental Free Trade Area. Operationalized in January 2021, the AfCFTA represents the world’s largest free trade area by number of member states, spanning 1.3 billion people across the continent. The agreement aims to increase intra-African trade, which historically accounted for only 12-18 percent of total continental trade, by eliminating tariffs and reducing non-tariff barriers.

Recent trade data demonstrates early AfCFTA successes, with countries like Rwanda exporting packaged coffee, tea, avocado oil, and honey to Ghana, and Tanzania trading coffee with Algeria and sisal fiber to Nigeria. South Africa’s inaugural shipment to Kenya under AfCFTA rules included refrigerators, machinery, and agricultural products, symbolizing progress toward more integrated regional supply chains.

However, the AfCFTA’s potential to compensate for lost access to US markets is constrained by infrastructure gaps, regulatory harmonization challenges, and the reality that American consumers remain an important source of demand for certain African products, particularly apparel and agricultural goods. The loss or degradation of AGOA preferences, combined with punitive tariffs related to Iran trade, could force a painful adjustment period even as intra-African commerce develops.

Alternative Financing and Trade Diversification Strategies

African countries facing the dual challenges of potential Iran-related tariffs and broader US trade barriers are increasingly looking to diversify their economic partnerships. China-Africa trade reached $295 billion in 2024, dwarfing the $8 billion in AGOA-linked commerce with the United States. The European Union, India, Turkey, and Gulf states are all expanding their economic footprint across Africa, offering alternative markets for African exports and sources of investment and technology transfer.

Some African nations have begun pursuing bilateral trade agreements with the United States as a hedge against AGOA uncertainty. Kenya has been particularly active in negotiating a potential free trade agreement, viewing such a pact as offering more durable market access than the annually reviewable AGOA preferences. However, the Trump administration’s track record of using tariffs to pressure even formal treaty partners raises questions about how much security such agreements would actually provide.

Zimbabwe, which was not eligible for AGOA, has responded to US trade barriers by working to liberalize its customs regime to expand regional trade, illustrating one path forward for countries that find themselves shut out of American markets. South Africa has been seeking exemptions and quotas to maintain access for its most vulnerable industries, though the Trump administration’s public criticism of South African trade practices suggests such relief may not be forthcoming.

The development of domestic capital markets and local currency bond markets offers another avenue for African countries to reduce dependence on dollar-denominated trade and financing. Several African countries have been working to deepen investor bases and create more resilient financial infrastructure that can buffer against external trade shocks, though this remains a long-term project requiring sustained institutional development.

The Legal and Policy Uncertainties

Multiple layers of legal and policy uncertainty surround both the Iran tariff announcement and the broader US tariff regime as it applies to Africa. On the Iran measure specifically, the White House has provided no official documentation about the policy, no information about enforcement mechanisms, and no clarification of the legal authority being invoked. This absence of procedural clarity creates difficulties for African governments trying to assess their exposure and for businesses attempting to comply.

The breadth of the phrase “doing business with Iran” is particularly problematic. Does it capture any commercial transaction whatsoever, or only trade above certain thresholds? Would it apply to historical contracts signed before the tariff was announced, or only to new business undertaken after January 12? Do services count, or only goods? Would humanitarian trade in medicine or food be exempted? None of these questions have been answered.

The Supreme Court’s pending review of Trump’s broader tariff authority adds another element of uncertainty. If the Court were to rule that tariffs imposed under IEEPA without specific congressional authorization are unconstitutional, the legal foundation for much of the current US tariff regime—potentially including the Iran measure—could collapse. However, such a ruling could take months to emerge, and even an adverse decision might not apply retroactively, leaving the current trade landscape in place for the foreseeable future.

For African countries, this uncertainty makes it extraordinarily difficult to formulate coherent trade strategies. Businesses dependent on US market access cannot know whether maintaining any commercial ties with Iran would trigger sanctions, whether AGOA will provide meaningful relief, or whether the current tariff structure will survive legal challenge. This unpredictability itself creates costs, deterring investment and complicating supply chain planning.

Implications for Jobs and Development

The human cost of escalating US trade barriers for African economies extends well beyond macroeconomic indicators to affect millions of livelihoods across the continent. According to research by the German Institute of Development and Sustainability, approximately 1.3 million jobs are at risk in AGOA-dependent industries across African countries—concentrated in sectors where workers often have limited alternative employment options.

In Kenya alone, over 66,000 people, many of them women, are employed in textile and apparel production for export to the American market. Madagascar faces particularly steep challenges, with tariff rates as high as 47 percent threatening its textile and vanilla exports—industries that provide employment for thousands in a country where alternative economic opportunities are scarce. Lesotho, with one of the highest tariff exposures at 60 percent under the reciprocal tariff regime, faces severe pressure on its apparel sector, which has been a rare bright spot in an otherwise struggling economy.

From garment factories and horticultural producers in Kenya to automotive manufacturing in South Africa, an estimated 300,000 direct jobs and one million indirect jobs depend on AGOA-facilitated trade with the United States. The addition of Iran-related tariffs to this landscape could accelerate job losses, with cascading effects on poverty, migration, and political stability.

The development implications are equally concerning. AGOA was designed not merely to facilitate trade but to encourage market-oriented reforms, strengthen rule of law, protect human rights, and promote economic diversification away from extractive industries. Countries have made substantial investments in building production capacity, training workers, and developing supply chains oriented toward the US market based on expectations of continued preferential access.

Abrupt loss of that access, or its erosion through punitive tariffs, wastes those investments and discourages future efforts at economic transformation. For countries working to move up value chains from raw commodity exports to processed goods and manufactured products, loss of the US market eliminates a critical demand source for higher-value exports.

The Risk of Regulatory Arbitrage and Enforcement Challenges

Implementation of a tariff based on commercial relationships with Iran would face significant practical challenges that could undermine its effectiveness while still creating substantial costs and distortions. Determining which countries are “doing business with Iran” would require extensive monitoring of global trade flows, investigation of corporate ownership structures, and assessment of whether particular transactions should trigger sanctions.

The risk of regulatory arbitrage is substantial. Companies and countries facing the tariff could restructure their operations to distance themselves formally from Iran trade while maintaining commercial ties through intermediaries, subsidiaries, or third-party traders. This kind of paper reorganization might satisfy the letter of US requirements while frustrating their spirit, creating economic inefficiency without achieving the policy goal of isolating Iran.

Small and medium-sized enterprises in Africa would face particular disadvantages in navigating this complexity. Large multinational corporations have the legal and compliance resources to restructure operations, establish separate supply chains, and document their non-involvement with Iran. Smaller African businesses lack these capabilities and may simply find themselves shut out of the US market through inability to prove compliance with vaguely defined requirements.

The burden on US Customs and Border Protection to verify the origin and commercial history of imports would be enormous, potentially creating delays and administrative costs that function as de facto trade barriers regardless of whether particular shipments technically qualify for tariffs. African exporters have historically faced challenges with US customs procedures even under normal circumstances; adding another layer of sanctions compliance could make trade prohibitively complicated.

Diplomatic Responses and Engagement Strategies

African governments have responded to the tariff announcement with a mixture of concern, confusion, and calls for dialogue. Several countries have reached out to the Trump administration seeking clarification and exemptions. According to the White House, over 75 countries contacted Washington to negotiate within a week of the broader reciprocal tariff announcements in April 2025, illustrating the diplomatic scramble such measures provoke.

Some African nations are offering unilateral concessions in hopes of avoiding the worst impacts. Zimbabwe, for instance, has proposed eliminating tariffs on US imports entirely, while South African President Cyril Ramaphosa met with Trump at the White House in April 2025 to discuss trade issues and attempt to negotiate more favorable terms. Madagascar and Lesotho have organized delegations to pursue bilateral deals.

However, the track record of such engagement producing meaningful relief has been mixed. The Trump administration has shown limited willingness to grant exemptions or carve-outs from its tariff policies, particularly when those policies are framed as advancing national security or foreign policy objectives. The Iran tariff is explicitly positioned as pressure on Tehran amid domestic unrest and as a demonstration of US willingness to use economic tools to advance geopolitical goals—contexts that may make the administration resistant to diluting the measure through exceptions.

Regional bodies and multilateral forums are also engaging on the issue. At the World Trade Organization, African members including Cabo Verde, Cameroon, Gambia, Liberia, Nigeria, and Sierra Leone joined a group of 39 “Friends of the System” that co-signed a communiqué pledging to “work closely together to shape the future of the global trading system” and undertake “bold, collective action” responding to challenges in the global economy.

Looking Ahead: Strategic Imperatives for African Policy

As African countries navigate this increasingly complex trade environment, several strategic imperatives emerge. First, accelerating implementation of the African Continental Free Trade Area becomes even more critical as a hedge against external market access risks. This requires not just eliminating formal tariff barriers but addressing the infrastructure gaps, regulatory fragmentation, and non-tariff barriers that currently limit intra-African commerce.

Second, diversification of export markets and trading partners must intensify. Over-dependence on any single market, including the United States, creates vulnerability to exactly the kind of arbitrary policy shifts now being witnessed. Deepening ties with Europe, Asia, and other African countries can provide alternative outlets for African exports and sources of investment, technology, and development finance.

Third, moving up value chains and developing domestic and regional production capabilities becomes crucial. The current crisis illustrates the risks of remaining dependent on preferential market access for commodity and low-value-added exports. Countries that can produce more sophisticated goods and services for consumption within Africa are less vulnerable to external trade shocks.

Fourth, engaging diplomatically while preparing for contingencies is essential. African countries should continue seeking dialogue with Washington and working through multilateral institutions, while simultaneously developing domestic policy responses that don’t depend on US cooperation. This includes regulatory reforms, investment in productive capacity, and development of alternative trade routes and partnerships.

Finally, African nations must work collectively to ensure their voices are heard in global trade governance. The current environment demonstrates the risks of a system where major economies can unilaterally impose trade restrictions with limited accountability. African participation in WTO reform efforts, advocacy for rules-based trade systems, and coordination through regional bodies like the African Union can help shape a more stable and equitable global trading environment.

Conclusion

Trump’s 25 percent tariff on countries trading with Iran represents the latest in a series of trade measures that have fundamentally reshaped the landscape facing African exporters. Coming on top of reciprocal tariffs, AGOA uncertainty, and broader protectionist trends in the United States and globally, the Iran measure threatens to further destabilize African economies already navigating multiple external pressures.

For countries like Nigeria, South Africa, Kenya, Ghana, and Tanzania—all of which maintain commercial relationships with Iran while depending significantly on access to the US market—the calculus is extraordinarily difficult. Completely severing ties with Iran may be economically and politically costly while offering no guarantee of avoiding future US trade restrictions. Maintaining those relationships risks triggering punitive tariffs that could devastate export sectors and cost hundreds of thousands of jobs.

The broader context of Iranian unrest and the catastrophic death toll from the government crackdown adds a humanitarian dimension to what might otherwise be purely an economic policy question. The Trump administration has framed the tariff explicitly as pressure on Tehran to change its behavior toward protesters, linking trade policy directly to human rights concerns—though critics note the irony of using measures that primarily harm third countries as a tool to influence Iranian domestic politics.

As the situation evolves, African countries will need to draw on all available diplomatic, economic, and policy tools to protect their interests. The crisis underscores the urgent need for more resilient, diversified, and internally integrated African economies that can withstand external shocks. It also highlights the importance of rules-based international trade systems that provide predictability and limit the ability of powerful countries to impose unilateral measures with sweeping extraterritorial effects.

The coming months will test African governments’ ability to navigate these challenges while maintaining economic growth, protecting jobs, and advancing broader development objectives. The outcome will have implications not just for US-Africa relations but for the future of African economic integration and the continent’s role in an increasingly fractured global trading system.

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By: Montel Kamau

Serrari Financial Analyst

15th January, 2026