The impact of the trade war between the US and China on the sub-Saharan African countries: A CGE GTAP model approach

This study examines the impact of the trade war between the US and China on the trade and economies of the SSA countries. Using social accounting matrix data from the GTAP database, the study employs a Computable General Equilibrium model (CGE), specifically the GTAP model, to run the simulations on the effects of the tariff changes between the US and China on the SSA regions. The results show that the trade war negatively affects both the US and China, creating opportunities through trade creation and diversion effects to the SSA countries. SSA is positively affected by the trade war in all tariff scenarios. East Africa and ROEA regions gain more than the other SSA regions. The sectorial results show that all sectors in the SSA encounter positive effects except the minerals and metal sector in East Africa and ROEA. The findings provide valuable insights for companies, consumers, and policymakers in the SSA countries. The trade war increased the ability of the companies to produce efficiently and meet the needs of consumers while maximizing their profit through the welfare allocative effects. The trade diversion from the US and China increased imports in the SSA regions, raising the availability of goods to meet customer needs. Policymakers may take measures to empower firms in the SSA to take more advantage of international trade-related activities. Key Words: China, Computable General Equilibrium Model (CGE), Global Trade Analysis Project (GTAP), Sub-Saharan Africa, Trade war, United States.