🌍 China offers Africa zero-tariff trade, Chanel starts recycling business

Hi Operators,

While AGOA remains in limbo (at least for Kenya; for everyone else it’s over in just 10 weeks), Africa’s biggest trade partner is introducing a similar trade platform.

Right now, China has special trade terms for 33 African countries considered the ‘least developed.‘ A new update announced this week brings middle-income countries under the special conditions umbrella and now covers the entire continent, with the exception of Eswatini — the only African country that maintains diplomatic ties with Taiwan (which to China is a province, not a country).

That means very soon, when your export-ready business sells fashion to Chinese retail buyers, they won’t pay an import tariff as part of the landing costs when they collect the order at a Chinese port — the same competitive advantage as AGOA. The goal is basically to allow us to sell to them on more favourable terms in the hope that we also end up buying more from them on the back of that growth to partially replace American demand that’s disappearing in the tariff war. [We actually already are — 12.4% more so far in 2025.]

Every pro has its cons: China’s growing economic power in Africa comes with a lot of opportunity but it also has the potential to put us in a different kind of tough spot.

Example: Chinese influence across Africa right now is mainly in infrastructure development. If current trends continue — like China using their lending power and state-owned construction company to build key transport infrastructure in Tanzania — we could end up with a continent heavily dependent on infrastructure we don’t own.*

*Okay, technically we would own it, but in the same way that you own a house you’re contractually obligated to pay for over the next 20-30 years. That isn’t really a lot of time in economic development years, so our growth needs to speed up. Seriously.

With this deal, Chinese influence in other sectors (like textiles and apparel) is likely going to deepen, with a similar power dynamic to AGOA. This time I hope we strategically bake more diversified global trade pies than say, Lesotho’s AGOA dependency, for example.

Let me be clear, none of this means we should be wary of selling to China — in fact, African fashion (and African everything else) should do as much trade as possible with China and its fast-growing base of curious, experimental, style-conscious consumers, and we can if we produce clothes that truly compete on more than price or ‘curio’ value, and if we leverage our ‘soft power’ (aka cultural influence) to drive global demand for Made in Africa. We just need to limit dependency on Chinese trade to lower our risk and do business on more equal footing.

The long and short of it is that Africa needs lighting fast trade volume growth: we need to be selling so much more than we’re selling right now, quickly (and not just to China), to pay back development loans ASAP, to create more jobs and grow economies, to increase trade negotiation power, and to use trade deals like this to become more independent, not remain dependent but in a different direction.

With thanks,
Modupe

PS, about 60% of you have been steadily reading all year (thank you!), meaning you’ve followed the tariff drama as it unfolded, so by now you’ve got to have an opinion and I would love to hear it. What do you think Africa should do differently in a zero-tariff deal with China than what we did with the USA? Hit reply to share thoughts.

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