Modern Mining January 2025

that projects like the Lobito Corridor should be configured to avoid reflecting the colonial extraction model. Infrastructure projects should be clearly designed to ensure economic spillover benefits for the entire region through enhancing entrepreneurial dynamism and generating side-stream and upstream opportunities from Africa’s extensive mineral wealth. In short, Trump and his economic advisers should tread carefully and strategically on the tariff front, not to simply ‘teach China a lesson’ but to ensure gains for its domestic labour force and benefit for African countries who would otherwise continue their march into Chinese indebtedness. n

jobs are increasingly threatened by mindless digitalisation and automation. As Nobel laureate, Daron Acemoglu, has consistently pointed out, the marginal gains from this approach are insufficient to warrant it. Higher inflation from arbitrary tariffs on Chinese goods will create acute welfare losses in the US that will be hard to justify politically, especially given the growing automation threat. The Federal Reserve typically responds to inflationary signals by increasing interest rates. We are only just beginning to recover from peak interest rates, and it would be enormously damaging for global growth to return there. A wiser approach, it seems to me, is to only impose severe tariffs on Chinese products if Xi demonstrates any further aggression (clearly defined and communicated) in the South China Sea and Taiwan invasion ambitions. This can be extended to China’s tacit support for Russia against Ukraine, and evidence of its growing alliance with Iran and North Korea. The US should be careful not to push China deeper into this alliance through random brinkmanship. Avoiding this would require a careful fine-tuning of tariffs and export taxes for very specific ends. For instance, the US would be wise to diversify its sources of rare earth and other green transition minerals away from China and towards Africa instead, partly through taxing Chinese imports disproportionately. It may also make sense to limit the supply of high-tech goods to China, through export taxes, that will prevent it from building more sophisticated weaponry. This means that the US would do well to provide African countries with genuinely mutually beneficial deals to secure green minerals. China has a significant head start in this arena through its Belt Road Initiative (BRI). The US will have to get smarter in how it engages in Africa, as I argued in this column last month. Preferential access to US markets through a reconfigured AGOA may afford the US an opportunity to place subtle foreign policy conditions on African governments. But these will only work if those governments see preferential access as a genuine good, concomitant with opportunities to add domestic value – where sensible – to raw materials prior to exports. Perhaps the more important thing here, though, is

The US would be wise to diversify its sources of rare earth and other green transition minerals away from China and towards Africa.

Trump and his economic advisers should tread carefully and strategically on the tariff front.

JANUARY 2025 | www.modernminingmagazine.co.za  MODERN MINING  61