The Centre for Trade Policy and Development (CTPD) is concerned about the potential negative spillover effects on Zambia’s economy resulting from the ongoing trade war between China and the United States of America (USA). The two countries are
locked in a trade war that has seen both sides impose tariffs of over 100 percent on goods imported from the other— potentially causing the growth of the Chinese economy to slow down. This, in turn, may negatively impact Zambia’s economy which trades in
significant volumes with China.
The USA is the third largest importer of Chinese commodities (importing 14.8 per cent of China’s $3.4 trillion worth of global export in 2023). The US imports major commodities from China which include electric batteries, heaters, motor vehicle parts and accessories, broadcasting equipment and computers. China in turn, is one of Zambia’s biggest trading partners, only second from Switzerland. In 2024, Zambia’s exports to China stood at 21 percent or USD 2.4 billion. The majority of products that Zambia exports to China are mineral products that include copper, Sulphur and earth stones.
CTPD is concerned that as the trade war rages, both China and the US will experience a significant reduction in trade volumes consequently hurting the two economies. Consequently, this can affect Zambia’s exports to China in several ways.
Firstly, China may directly reduce imports of copper and other minerals which it uses as a raw material in the production of motor vehicles and other electronics. Secondly, a sluggish growth in China’s economy has consequences that spill to its trading partners in ways that may not be easily predicted. Zambia’s narrow export profile may further expose it to higher risks. Moreover, the country’s exports is largely composed of raw materials of which over 70 percent are minerals. If China reduces demand for copper, prices will go down and Zambia’s mining sector will be hit hard.
CTPD calls on government to vigorously pursue policies that priorities value addition to minerals as well as agricultural commodities in order to broaden, not only the scope of goods but also the demand for Zambia’s products. CTPD further calls on the government to provide support to farmers and other stakeholders looking to trade through the Africa Continental Free Trade Agreement as this will provide an alternative avenue for foreign exchange earnings.
