Home | Goldstreet Business
Friday, June 13, 2025
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
Gold Business Logo
No Result
View All Result

Ghana’s stake in the US – China trade war

October 1, 2018
in Uncategorized
0
Share on FacebookShare on Twitter

The shots continue to be fired in what increasingly looks likely to deteriorate into a full-blown trade war between the world’s two biggest economies. Onajite Sefia examines how the situation can impact on the Ghanaian economy.

A third world war has for decades been a favourite subject for military fiction writers such as Tom Clancy and Sir John Hackett. Invariably, those fictional, futuristic accounts have always imagined it to be a physical war between East and West and with the profound changes in the global geo-political structure over the past quarter of a century, the likelihood of such fiction becoming reality is behind the horizon.

Now however, a replacement scenario is unfolding; one which no one could have seen coming even a couple of years ago – a third world war where trade policy and import tariffs are the weapons of attrition rather than military aircraft, naval warships, tanks and soldiers. And China has replaced the hitherto Soviet Union as the primary force facing down the United States.

RELATED POSTS

Ghana Nets Over $1.17 Billion in Forex from Goldbod Programme – Finance Minister

FDA boss elected first Director-General of African Medicines Agency

While this is actually an overly dramatic representation of the gradually intensifying trade war between America and China, it is nonetheless a war with potentially global impact and global dominance as the ultimate prize.

Last week, President Nana Akuffo Addo warned of possible consequences for the Ghanaian economy from the ongoing fray. Already Ghana is having to cope with external pressures caused by the US Federal Reserve Bank’s ongoing interest rate hikes which are strengthening the dollar and consequently forcing emergent market economies local currencies downward in value. Although the cedi’s depreciation so far this year is much smaller than that for many other emerging market economies, most notably Argentina and Turkey among several others, its effects in Ghana are magnified by the levels of its import dependence of both goods and capital. President Akuffo Addo’s discomfort with regards to the possible effects on Ghana of the growing trade dispute between the US and China is intensified by the knowledge that the evolving turn of events is completely outside the control of state economic managers in Accra.

Negotiators from both the US and China are still making frantic efforts to head off a full blown trade war between the world’s two biggest economies in the knowledge that it would do immeasurable damage to the global economy.

However, most analysts fret that those efforts will come to nothing because the main protagonists on each side are using it to divert attention away from domestic political failings and therefore find the growing face off to be politically expedient.

On the one side, American President Donald Trump is using China as a counterfoil to regain the support of erstwhile loyalist blue collar voters who have been disappointed by his failure to curb illegal immigration and to build the wall on the border with Mexico, both of which he had convinced them are responsible for their not having much better incomes and consequent living standards.

On the other side, Chinese President Xi Jinping is using America to garner dwindling support for state domination of China’s polity, which manifests in the form of government’s manipulation of the economy and lack of popular democracy.

But even as Ghanaians alongside the rest of the world, worry over the global fallout of a full-blown trade war between the two, they are also looking to see whether there are any potential advantages up for grabs.

There are, but those potential advantages also carry possible draw backs. This means Ghana will have to think strategically in its efforts to exploit them.

The most obvious potential lies with soya beans export. As part of its first wave of retaliatory measures to Americas imposition of 25% and 1O% import tariffs on steel and aluminum respectively, a move clearly targeting Chinese exports, China imposed 25% import tariffs on soya beans exported from the US. This is one of the biggest retaliatory measures taken by China against the US so far.

China is the world’s biggest buyer of soya beans, importing about 6O% of the volumes traded internationally, which it uses mainly for animal feed, while sorghum is the third largest cereal grown in the US. This has made for vibrant trade between the two – in 2O17, the US sold US$32.9 billion worth of soy beans to China, thus being the latter’s second largest source of supply after Brazil.  However, even prior to the new import tariffs imposed by China, American soy beans farmers were already operating at thin profit margins and so the new tariffs will render them price uncompetitive.

As with wars of all types, whether military or economic, each move by each protagonist, causes troubles for both sides; the new import tariffs will create supply problems for China’s livestock industry as well as for American farmers. The most obvious alternative source of supply is Brazil, the world’s leading exporter of the grains, but China already buys 75% of that country’s production which is already running at close to full capacity. Another alternative is Argentina, the world’s third largest exporter, where soy beans accounts for 17.5% of its total exports but a prolonged drought has curtailed its capacity to significantly expand production.

Ghana, on its own part has major capacity to expand production of raw soy beans, particularly from the three northern most regions. The country currently only produces 5O,OOO metric tons  but has the capacity to expand cultivation several times over at short notice since it is not capital intensive, does not have complex storage requirements, and is not easily susceptible to disease and pests. However, most of the local demand is for processed, rather than raw soy beans and typically, domestic processing capacity is severely limited, forcing the country to import large volumes of processed soy for its own livestock industry to feed on.

The imminent supply shortage facing China as a result of its trade dispute with the US now offers a huge export market for raw soy bean exports. While increased cultivation is not a short term process, all Ghana needs to do before the newly ignited trade imbroglio between China and the US is resolved, is to get its foot in the door to China’s economy; even after the issues with the US are resolved, whatever supply contracts entered into with Ghana would remain in force and China, having learnt from the ongoing trade dispute. would be only too happy to remain less reliant on American exports of the grain. It is instructive that a few years ago, a Chinese businessman, William So, made business news headlines in Ghana with his efforts to get the country to significantly increase its raw soy bean export capacity, this with a view to securing a new supply source for export to his home market.

However there is a downside to this – successful expansion of raw soy beans exports by opening up the vast Chinese market, could all to easily divert attention and efforts away from striving to increase Ghana’s domestic processing capacity.

While this is a purely economic issue, the wider opportunities available to Ghana resulting from the ongoing trade war, are more geopolitical. China has been seeking to secure increased natural resources from Africa, Ghana inclusive, for the past decade, using substantial foreign aid as a bait for securing production and sales agreements across oil, solid minerals and agricultural produce alike. It is instructive that China has, over the past year, regarded the Trump presidency in America as a great opportunity to win international trade market share from its rival and the new trade dispute has made this objective a strategic imperative.

Ghana itself has been seeking stronger economic ties with China for more than a decade now and that country’s approach to trade relations as a tool to increase productive capacity, such as the proposed use of Ghana’s bauxite as leverage for Chinese investment in economic infrastructure has greater appeal to the President Nana Akufo-Addo administration than the foreign aid assisted demand management policies recommended by the West.

Thus China’s ongoing dispute with the US, which opportunely has come in the wake of President Trump’s derisive description of African nations as “shithole” countries, presents an opportunity for Ghana to replace the West with China as its leading economic partner.

It is instructive that over the past year or so China has been more aggressive than usual in committing to support government’s initiative. A 2.5 billion commitment to providing factory infrastructure and equipment under suppliers’ credit terms for investors under government’s flagship one district one factory initiative is now being followed by concerted efforts to move forward 12-billion-dollar initiative to provide public infrastructure in exchange for bauxite mining rights.

However, Ghana will have to tread this path with extreme caution for two reasons. One is that China is indeed guilty of what Trump calls “economic aggression” in its relationships with other countries. Indeed, the US$375 billion trade deficit with China that the US incurred in 2O17 – which Trump wants reduced to US$1OO billion a year in order to end the trade dispute – is largely the result of coercive technology transfer and intellectual property acquisition by China, coupled with anti free market subsidies to its state owned enterprises and its refusal to open up key sectors of its economy, most notably financial services, to foreign competition. If Ghana adopts China as its main trade and investment partner, it should be ready to play by rules not covered by the World Trade Organization’s framework for international trade, but which give China undue advantage.

It is instructive that Ghanaian private sector chieftains are already voicing their concerns as to the likely bilateral trade policy induced increase in Chinese consumer goods exports to Ghana under a closer economic relationship between the two countries, which inevitably would be at the expense of domestic manufacturers. China’s dexterity in extracting maximum gain from its business deals with African emerging market economies is being illuminated ion Ghana by the ongoing Star times sports broadcasting. imbroglio

The second worry is that although the European Union countries – with which Ghana does even more business than with the US itself – do not particularly like Trump’s isolationist economic policies, they agree with his handling of what they agree is China’s economic under handedness. This means that Ghana’s shift towards China could put it at odds with its traditional closest economic allies, a situation that confirms that the China – US trade imbroglio is indeed a “world war.”

Indeed, even as Ghana seeks to maximize the potential advantages being generated by the growing trade dispute, it will need to ensure that it does not openly side with the ultimate loser, a strategy necessary for every nation that gets involved in a world war of any sort, whether military or economic.

facebookShare on Facebook
TwitterTweet
ShareTweetShare

Related Posts

Ghana Nets Over $1.17 Billion in Forex from Goldbod Programme – Finance Minister

Ghana Nets Over $1.17 Billion in Forex from Goldbod Programme – Finance Minister

June 5, 2025
FDA boss elected first Director-General of African Medicines Agency

FDA boss elected first Director-General of African Medicines Agency

June 5, 2025
Importers and Exporters Association calls on President Mahama to terminate ‘wasteful’ SML contract

Importers and Exporters Association calls on President Mahama to terminate ‘wasteful’ SML contract

June 5, 2025
Prof. Bokpin believes stabilizing the cedi at GH₵10–12 is the right approach

Prof. Bokpin believes stabilizing the cedi at GH₵10–12 is the right approach

June 5, 2025
Doctors at Ridge Hospital ‘are overburdened’ as nurses strike bites – Medical Director

Doctors at Ridge Hospital ‘are overburdened’ as nurses strike bites – Medical Director

June 5, 2025
Next Post

GIBS launches new Africa centre for research on economies and management

2018 GGFS ends with emphasis on greener environmental maintenance

Archives

<
June 2025
  • June 2025
  • May 2025
  • April 2025
  • March 2025
  • February 2025
  • January 2025
  • December 2024
  • November 2024
  • October 2024
  • August 2024
  • July 2024
  • June 2024
  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
▼
>
MonTueWedThuFriSatSun
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
     12
3456789
10111213141516
17181920212223
2425262728  
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
   1234
567891011
12131415161718
19202122232425
262728293031 
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
   1234
567891011
12131415161718
19202122232425
26272829   
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
  12345
6789101112
13141516171819
20212223242526
2728     
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
 123456
78910111213
14151617181920
21222324252627
28      
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
1234567
891011121314
15161718192021
22232425262728
       
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
     12
3456789
10111213141516
17181920212223
242526272829 
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
    123
45678910
11121314151617
18192021222324
25262728   
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       

RECOMMENDED

Ghana Nets Over $1.17 Billion in Forex from Goldbod Programme – Finance Minister

Ghana Nets Over $1.17 Billion in Forex from Goldbod Programme – Finance Minister

June 5, 2025
FDA boss elected first Director-General of African Medicines Agency

FDA boss elected first Director-General of African Medicines Agency

June 5, 2025

MOST VIEWED

Plugin Install : Popular Post Widget need JNews - View Counter to be installed
  • Energy
  • Health
  • Auto
  • International
  • Subscription Form
  • Staff Webmail
  • About Us
  • Contact Us
Call us: +233 24 432 0902 | info@goldstreetbusiness.com

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

No Result
View All Result
  • Homepages
    • Homepage Layout 1
    • Homepage Layout 2
  • World
  • Business
  • Technology
  • Health

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.