What do Tanzania and Vietnam have in common?
The former can do for South Africa what the latter did for its northern neighbour during Donald Trump’s first spell in the Oval Office, when the US embarked on a tariff-driven trade war against China for perceived industrial transgressions.
At least that’s according to Conrad Kisanga of the Tanzania Chamber of Commerce, Industry and Agriculture.
Speaking at a trade and investment presentation at the Johannesburg Chamber of Commerce and Industry on Thursday, the executive director of the TCCIA said he had noted with interest the visit by President Cyril Ramaphosa to US President Trump the day before.
Considering that South Africa could face 30% “reciprocal tariffs” on exports to the US from mid-June, when a 90-day pause on so-called “Liberation Day” tariffs ends, Kisanga said it was a good reason for local exporters to invest in business development in Tanzania.
If the bilateral trade visit by Ramaphosa and his delegates to Washington fails to bear fruit, certain South African exports, especially from the agricultural sector, will face steep tariffs.
“If you go, you will be taxed 30%,” Kisanga said.
“But in Tanzania, if you want to export to America, it’s 10%” – a baseline tariff currently in place for countries like South Africa, while the 90-day pause is still in effect.
During Trump's first term in office (2017-’21), Vietnam emerged as a significant beneficiary of the US-China trade war as tariffs on Chinese goods led manufacturers to shift production to Vietnam to avoid US tariffs.
This shift was partly due to Chinese exporters rerouting goods through Vietnam to circumvent the tariffs imposed on China, a practice often referred to as trade rerouting or transhipment.
Because of Vietnam's growing trade surplus with the US and perceptions that it was being used as a backdoor by Chinese exporters to avoid tariffs, the Trump administration in April targeted Vietnam with steep reciprocal tariffs, imposing a 46% tariff on all Vietnamese imports.
Vietnam Briefing reported that it was one of the highest rates globally, citing Vietnam's large trade surplus and alleged tariff circumvention as reasons.
As for Tanzania and investor streamlining in its burgeoning economy, in 2019, the World Bank’s Ease of Doing Business (EDB) Barometer ranked Tanzania 141 out of 190 economies.
It was found at the time that Tanzania’s EDB score was compromised by cross-border trade difficulties, inefficient insolvency resolution processes, minority investor protection problems because of legal framework weaknesses, regulatory environment complexities stemming from bureaucratic red tape, SMME challenges in obtaining credit, high infrastructure costs, underdeveloped road networks, unreliable electricity supply and related operational costs, tax compliance and the slow pace of government reforms.
However, under President Samia Suluhu Hassan, who succeeded John Magafuli in March 2021, a raft of government reforms has eased investor confidence, sparking a new trajectory of growth for the East African nation.
More recent surveys related to business environment perceptions, such as the Stanbic Bank Africa Trade Barometer in 2024, show positive business confidence and improvements in trade-related infrastructure and credit access under the current administration.
Kisanga emphasised that Tanzania, like South Africa, was a fellow beneficiary of the African Growth and Opportunity Act, the trade and investment framework Ramaphosa is trying to protect during his visit to the US.
“We are open for business,” he said.
