Retaliatory tariffs will hurt Ghana more – Dr Amin Adam cautions against trade war with US

Former Finance Minister Dr. Mohammed Amin Adam has advised Ghana against imposing tariffs on the United States. He warned that such a move could harm the domestic economy and hinder recent recovery efforts.

Dr. Adam spoke at the UPSA National Dialogue on May 19. He addressed concerns about rising global protectionism due to new US tariffs on Ghanaian imports. While he recognized the negative impact on local exporters, he urged caution.

“We are in an era of trade wars because of US tariffs,” Dr. Adam stated. He noted that these tariffs reduce the competitiveness of Made-in-Ghana products in the US market. This also lowers profitability for Ghanaian exporters, which means less tax revenue for the country.

The former minister explained that countries like China and Canada have imposed reciprocal duties, but Ghana should not follow suit. “Our total export to the US is about 2% of GDP,” he said. “Non-exempt exports under the new US tariffs stand at 0.4%.” The overall effect is limited, especially regarding international trade, which supports recovery.

Dr. Adam warned that counter-tariffs would raise costs for US imports, affecting consumers in Ghana. “A reciprocal tariff will increase costs of US exports to Ghana,” he explained.

He highlighted strong local demand for imported goods from the United States. “Ghanaians have a strong preference for imported products,” he said. This situation could reduce disposable income and lead to lower consumption and tax revenue.

In conclusion, Dr. Adam emphasized that Ghana's economic interest lies in maintaining stable trade relations rather than escalating tensions with major partners.