Former Finance Minister, Dr Mohammed Amin Adam, has advised Ghana against imposing retaliatory tariffs on the United States, warning that such a move could backfire on the domestic economy and derail recent gains in economic recovery.
Speaking at the UPSA National Dialogue on Monday, 19 May, Dr Adam addressed concerns over rising global protectionism following new tariffs imposed by the US on several Ghanaian imports. While acknowledging the negative impact on local exporters, he urged caution.
“We are in the era of trade wars because of the tariffs imposed by the United States of America,” Dr Adam stated.
“Tariffs on imports from Ghana reduce the competitiveness of Made-in-Ghana products in the US market. But reducing the profitability of Ghanaian exporters also means reducing tax revenue for our country.”
The former minister explained that while countries like China and Canada have responded with reciprocal duties, Ghana should not follow the same path.
“Our total export to the US is about 2% of GDP, with non-exempt exports under the new US tariffs standing at 0.4%,” he said. “The effect is therefore very limited, particularly on our international trade position, which has largely supported our recent recovery.”
[embedded content]Dr Adam warned that introducing counter-tariffs would increase the cost of US imports, a move that could have unintended consequences for Ghanaian consumers.
“A reciprocal tariff on imports from the US will increase the cost of US exports to Ghana,” he explained.
He further highlighted Ghana’s consumption patterns, emphasising the strong local demand for imported goods, particularly from the United States.
“Given the obsession in Ghana for imported products, this will reduce the disposable income of Ghanaians, thus leading to lower consumption and lower tax revenue.”
Dr Adam concluded by stressing that Ghana’s economic interest lies in maintaining a stable trade environment rather than escalating tensions with major partners.
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