Former Vice President of Ghana, Dr. Mahamudu Bawumia, has cautioned policymakers against using tariffs as a tool to correct trade imbalances, arguing that trade deficits are fundamentally macroeconomic issues rather than failures of trade policy.

Speaking at the International Democracy Union (IDU) Forum in Brussels on Saturday, Dr. Bawumia addressed the growing trend of trade weaponisation and its implications for African economies, particularly Ghana.

“Policymakers are increasingly ignoring both economic fundamentals and the lessons of history,” he remarked, responding to a question on Africa’s vulnerability to global trade tensions.

Citing global trade statistics, Dr. Bawumia noted that Africa contributes just 2.5% of global exports and 2.9% of imports, while the bulk of global trade is dominated by Asia, Europe, and the United States.

Despite these imbalances, he strongly rejected the notion that tariffs can resolve trade deficits.

“You cannot fix a trade deficit with tariffs — it simply doesn’t work,” he stated, pointing out that such deficits reflect deeper economic dynamics.

He explained that a country running a trade deficit is typically spending more than it saves, making it a savings-investment gap — a macroeconomic issue.

Dr. Bawumia referenced historical cases such as the 1930s Smoot-Hawley Tariff Act in the United States, which contributed to the Great Depression, and the 2018–2019 U.S.-China tariff war, which disrupted global supply chains and trade flows.

Highlighting recent developments, he warned of the potential fallout from the U.S.’s significant tariff hike — from an average of 2.4% to 10% — marking the steepest increase since 1943. “The effects will be significant,” he said.

Turning to Africa’s position in global trade, Dr. Bawumia observed that while the continent is relatively insulated from direct U.S. trade shocks, there are exceptions.

He pointed to Lesotho, whose textile exports to the U.S. under the African Growth and Opportunity Act (AGOA) account for half of the country’s total exports, making it particularly vulnerable to shifts in U.S. trade policy.

Looking ahead, he predicted that Africa’s response to growing trade volatility will involve a renewed emphasis on self-reliance, economic diversification, and enhanced intra-African trade — key pillars of resilience in an uncertain global landscape.