FAGE Shifts Exports from U.S. Market Amid 10% Tariff Increase, Focuses on AfCFTA Opportunities

The Federation of Associations of Ghanaian Exporters (FAGE) has called for a strategic diversification of Ghana’s export markets following the recent imposition of a 10% tariff on Ghanaian exports to the United States (U.S.). The new tariff, introduced by the Trump administration, has taken many exporters by surprise, prompting the federation to advocate for a broader approach to global trade, including a stronger focus on the African market through the African Continental Free Trade Area (AfCFTA).

Historically, the United States has been a crucial trade partner for Ghana, benefiting from preferential trade terms under agreements like the African Growth and Opportunity Act (AGOA). This long-standing relationship has seen Ghana export key products, such as cocoa, gold jewelry, shea butter, and agricultural goods like yams, cashews, and fruits. However, the recent tariff hike is creating significant challenges for Ghanaian exporters, who now find their products less competitive in the U.S. market.

In an interview with Graphic Business, Davis Korboe, President of FAGE, described the 10% tariff as a “major blow” to the country’s export sector. He expressed concerns over the impact the tariff could have on Ghana’s long-term trade strategy, especially given the heavy reliance on the U.S. market.

“We already face high production costs in Ghana, and the addition of a 10% tariff makes our products even less competitive in the U.S. market,” Korboe explained. “This is why we have always called for market diversification. Relying on just one market is risky. We need to spread our exports across multiple regions.”

U.S. Tariff Announcement and Its Impact

On April 2, 2025, U.S. President Donald Trump announced the imposition of a 10% tariff on all imports, including goods from Ghana, effective April 5, 2025. This decision, part of a broader trade policy aimed at addressing the U.S.’s global trade deficits, has created widespread concern among exporters. While goods already in transit before the announcement are exempt, the tariff has disrupted existing trade agreements and contracts.

The tariffs were imposed under the International Emergency Economic Powers Act of 1977 (IEEPA), citing national security and economic concerns. As part of the same policy, the U.S. has also enacted reciprocal tariffs on over 50 countries, with rates ranging from 11% to 50%, which will go into effect by April 9, 2025. Certain products, including copper, pharmaceuticals, semiconductors, and energy goods, are exempt from the new tariffs.

The U.S. market has been particularly important for Ghana’s exports, as it serves as a major destination for the country’s key products. The tariff increase, however, threatens to reduce the competitiveness of Ghanaian goods in the U.S. and has prompted exporters to search for alternative markets.

AfCFTA as a New Opportunity

Korboe emphasized that the African Continental Free Trade Area (AfCFTA) presents a significant opportunity for Ghana’s exporters to shift focus away from the U.S. and toward regional trade. With a combined market of over $3.7 trillion, AfCFTA offers Ghana the potential to expand its trade with neighboring countries and other African nations.

However, Korboe highlighted that the practical challenges of intra-African trade—such as poor infrastructure, lengthy customs procedures, and inconsistent trade regulations—must be addressed if the full potential of AfCFTA is to be realized. “We need to prioritize regional trade fairs, improve cross-border logistics, and enhance market intelligence to better understand the needs of African consumers,” he said.

Korboe stressed that while the AfCFTA holds immense promise, addressing the logistical barriers and inefficiencies that currently hamper trade will be critical to ensuring the success of regional trade integration.

Exporters Face Uncertainty

The sudden implementation of the tariff has created uncertainty for many Ghanaian exporters, some of whom had already sent shipments to the U.S. before the tariff was announced. Exporters are now scrambling to renegotiate contracts and determine who will bear the cost of the additional 10% tariff—either the exporters themselves or their American buyers.

“This is not just a trade issue; it’s a livelihood issue,” Korboe remarked. “For many exporters, their profit margins are already slim, and absorbing this 10% cost could push them out of business.”

Government Engagement and Support

In response to the new tariffs, FAGE has begun engaging with various government institutions, including the Ghana Export Promotion Authority (GEPA), the Ministry of Trade and Industry, and the Ministry of Foreign Affairs, to seek both diplomatic and trade solutions. Korboe urged exporters to remain calm and focus on rethinking their strategies during this time of disruption.

“This is not the time to panic, but to plan. We must use this as an opportunity to realign our export priorities and build stronger intra-African trade ties,” he said.

The Ministry of Trade and Industry has also assured Ghana’s exporters that the government is committed to engaging the U.S. to address the tariff issue. The Ministry is working with key stakeholders to evaluate the full impact of the tariffs and explore strategies to minimize the adverse effects on Ghana’s economy.

Additionally, U.S. Ambassador to Ghana, Virginia Palmer, has indicated that Ghana may receive some advantages in the tariff negotiations compared to other countries.

“We hope that Ghana will receive some benefits relative to its competitors,” she said, offering a potential silver lining for exporters facing new challenges.