Uganda hit by tariff shock

By Simon Mulongo 

On April 2, this year, US President Donald Trump declared “Liberation Day,” unveiling a set of sweeping protectionist measures. 

Chief among them was a universal 10% import tariff, accompanied by targeted reciprocal tariffs of up to 34% against key US trading partners. 

These actions, framed as a reclamation of economic sovereignty, signal a sharp return to transactional nationalism in trade policy. 

They emerge against a backdrop of rising geopolitical tensions: a looming military confrontation between the US and Iran, escalating standoff between China and Taiwan and the uneasy cessation of open warfare in Ukraine. 

This convergence of economic nationalism and geopolitical instability is not just an American matter — it reverberates across the global South. For Africa, and particularly for Uganda, the implications are structural, immediate and multidimensional. 

The global economy, already weakened by years of supply chain disruptions and monetary tightening, faces another round of shocks. 

The tariffs alone, according to global general equilibrium models, could depress global trade by over 3% and reduce world GDP by at least 1% within the first year. 

Uganda, whose exports to the US were valued at approximately $128.6m in 2023, will feel the squeeze. With Uganda already suspended from the African Growth and Opportunity Act due to governance concerns, the blanket tariffs remove any residual preferential access. 

Exporters of coffee, fish and textiles now face higher costs, reduced competitiveness and tighter entry requirements. 

These developments disproportionately affect small and medium producers, who lack the capacity to absorb new compliance and logistics costs. 

Simon Mulongo

As global demand contracts, Uganda’s already narrow export base could erode further. The bigger challenge lies in the macroeconomic spillover. Trump’s tariffs are not happening in isolation. 

In March this year, tensions in the Strait of Hormuz escalated after Iranian forces intercepted a commercial vessel, prompting US naval retaliation. 

Fears of a broader regional conflict pushed oil prices beyond $130 per barrel by early April. For Uganda, which is on the cusp of becoming an oil exporter through the Tilenga and Kingfisher projects, this initially appears beneficial. 

However, as a net importer of refined petroleum and with no domestic refining capacity, Uganda faces rising fuel and transport costs. Inflationary pressures are likely to build. 

The Bank of Uganda, which has held its policy rate at 10% since late last year, may have to tighten further, constraining access to credit and investment. 

Simultaneously, the worsening US-China relationship over Taiwan threatens to sever essential global supply chains. 

Taiwan’s centrality to semiconductor production and China’s role in global manufacturing means that any conflict would affect virtually every traded product. 

Uganda, which imports industrial machinery, medical equipment and electronics from Asia, will not be spared. Disruptions in shipment timelines and increased import costs would stall infrastructure projects and reduce the availability of essential public goods.

Meanwhile, the tail-end of the Ukraine war, though no longer actively destructive, has not restored agricultural and energy trade flows. 

Uganda’s food import inflation remains high, especially for cereals and fertilisers, with the Uganda Bureau of Statistics reporting an 11.4% annual increase in food prices as of March this year. 

These supply-side constraints place Uganda’s fiscal and monetary authorities in a difficult position. 

Concurrently, the Trump administration has continued its retreat from foreign development cooperation. 

US aid to Africa has been drastically cut since early 2025, particularly in sectors, such as health, climate adaptation and education. For Uganda, the effects are already visible. 

Local NGOs offering youth health and reproductive services report that US funding has dropped by over 40%, leading to clinic closures in several districts. 

Uganda’s growing reliance on non-concessional debt, already over 49% of GDP, increases refinancing risk and reduces fiscal flexibility. 

These developments are not episodic; they reflect deeper systemic shifts. The global order is fragmenting along geopolitical, economic and ideological lines. 

Africa, long peripheral to strategic calculations, finds itself further marginalised as great powers recalibrate around their own perceived national interests. 

Trump’s worldview, emphasising unilateralism and reciprocity, offers little room for development diplomacy. Countries that lack immediate strategic or commercial value are left to fend for themselves. 

Most importantly, President Museveni must help Africa reclaim a political voice in shaping global norms. Whether in the WTO, G20, or digital governance platforms, the continent must transition from policy taker to policy negotiator. 

The current crisis exposes the fragility of dependency. The path forward lies in strategic coherence, institutional reform, and continental solidarity. Africa must not only survive this turbulent reordering—it must emerge as a co-author of the next.

The writer is a governance and security consultant, EMANS Frontiers Limited.