KEY POINTS
- Dr. Amin Adam warns Ghana against retaliatory tariffs on US imports.
- Tariffs could raise import costs and lower disposable income in Ghana.
- Ghana’s economic growth depends on stable trade with the United States.
Dr. Mohammed Amin Adam, the former finance minister, advised Ghana against enacting retaliatory tariffs on the US, stating that doing so could hurt the country’s economy and jeopardize recent attempts at economic recovery.
Dr. Amin Adam warns against retaliatory tariffs on US imports
On Monday, May 19, Dr. Adam spoke at the UPSA National Dialogue about growing global protectionism in the wake of new U.S. tariffs on a number of Ghanaian products. Although he acknowledged the detrimental effects on regional exporters, he advised Ghana to proceed cautiously.
“Due to tariffs imposed by the United States of America,” Dr. Adam stated during his speech, “we are living in an era of trade wars.” He clarified that Ghanaian exporters are directly impacted by these tariffs since they make Made-in-Ghana goods less competitive in the US market.
Dr. Adam underlined that lower exporter profits also translate into lower tax collection for Ghana. While nations like China and Canada have retaliated with reciprocal tariffs, he noted that Ghana should steer clear of this course to avoid unforeseen repercussions.
He cautioned that imposing counter-tariffs would probably make U.S. imports more expensive, which might have a detrimental effect on Ghanaian customers who depend significantly on these products. He clarified that a reciprocal tariff on U.S. imports would raise the price of American exports to Ghana.
Dr. Adam went on to discuss Ghana’s consumption habits and the significant demand for imports, especially from the US, in the nation. Because of this dependence, rising tariffs may result in less money available to Ghanaian households.
“This will reduce disposable income, lower consumption, and ultimately lower tax revenue given Ghana’s obsession with imported goods,” he stated.
Ghana’s economic interest lies in stable trade relations
Dr. Adam emphasized in his conclusion that preserving a stable trading environment with its primary trading partners is the best way to advance Ghana’s economic objectives. In order to prevent rising trade tensions from impeding Ghana’s economic recovery, he advised prudence.
According to Myjoyonline, he reaffirmed that Ghana should prioritize long-term economic stability over potentially harmful short-term retaliatory actions. In order to successfully negotiate the intricate global trade environment, the former minister advocated for strategic diplomacy.
