South Sudan is the world’s youngest nation, having gained independence in 2011. Since then, its economy has been heavily dependent on oil. But for a small but growing group of traders, leather good producers, and resource-reliant businesses, new American tariffs represent a significant setback.
Background
In a recent policy shift, the US announced a 10% tariff on goods from several African countries, including South Sudan. This move is part of President Donald Trump’s “reciprocal tariffs” initiative will make niche exports like leather goods and Arabic gum slightly more expensive in the US market.
Since gaining independence in 2011, South Sudan has relied almost entirely on oil exports, which account for about 98% of its export earnings. Political instability, high inflation, and weak infrastructure have deterred investment in manufacturing, leaving the country dependent on imports.
Trade with the US in goods is minimal. In 2024, US goods imports from South Sudan totalled only $0.8 million, while goods exports to South Sudan reached $59.3 million, resulting in a US trade surplus of roughly $58.5 million.
A tariff is essentially a tax on imported goods, designed to make them less competitive compared to domestic products. While the financial effect on South Sudan may be modest given the low trade volume, the policy’s broader implications could be more significant.
Impact on South Sudan
With such a small export base to the US, the short-term overall hit to South Sudan’s economy will be limited. However, for industries that currently attract American consumers, the loss of competitiveness could be fatal. For example, a South Sudanese leather handbag which might currently retail at $100 would now sell for $110 in the US.
For niche consumer goods like handbags, South Sudanese exporters are already up against much larger-scale, mass producing competitors. In these circumstances, a $10 increase can make all the difference. With most South Sudanese incomes ranging from under $1 to just under $3 per day, losing a single sale to US markets can have significant implications for people whose livelihoods are exposed to the new tariffs.
The new tariffs will also impose a new barrier to South Sudan diversifying its resource exports. As well as oil, resources like Arabic gum, a key ingredient in soft drinks, pharmaceuticals, and cosmetics which South Sudan hopes to grow, may face reduced access to the American market.
However, new tariffs may present an opportunity for South Sudan Arabic gum exporters. US imports of the product from Sudan have fallen significantly in recent years, while nearby Chad, a significant source of US Arabic gum imports, faces a higher 15% tariff. Given the circumstances, it is possible that South Sudanese Arabic gum may be more competitive for US markets because of President Trump’s trade policies.
But this is one of the few potential opportunities from the new tariffs. Like many other African countries, South Sudan is working to attract foreign investment for its export industries and new trade barriers make that already difficult task even more of an uphill climb.
Recommendations
Diversify Export and Import Markets
South Sudan can respond to new trade disruption and strengthen its economic resilience by reducing its dependence on a narrow set of trading partners. Diversification should involve both expanding the range of products traded and broadening the number of international partners.
This includes tapping into regional opportunities through the African Continental Free Trade Area (AfCFTA) and the East African Community (EAC), enabling greater access to neighboring markets such as Kenya, Uganda, Ethiopia, and the Democratic Republic of Congo. Uganda, Kenya, Sudan, and Rwanda are four of South Sudan’s top five import sources and make up just over 2/3rds of South Sudan’s total imports, highlighting the need for deeper intra-African trade.
Beyond Africa, South Sudan should actively pursue trade and investment partnerships with the People’s Republic of China, Singapore, the European Union, and emerging economies in Asia and the Middle East. Targeting niche and high-value markets such as organic agricultural goods in Europe, processed foods in the Gulf, and refined oil products in Asia can help South Sudan capture higher returns and reduce vulnerability to commodity price fluctuations.
Reduce Barriers to High-Value Exports
To boost profitability and reduce vulnerability to trade barriers, South Sudan should address barriers to high value-added manufacturing which would reduce reliance on raw material exports in the long run.
For oil, this means investing in local refining to supply fuels, lubricants, and petrochemicals for both domestic and export markets, while developing petrochemical industries to manufacture plastics, fertilizers, and solvents.
In agriculture, crops such as sorghum, maize, sesame, gum arabic, and livestock yield higher returns if processed before export. For minerals, local smelting and refining, as well as producing jewelry or semi-finished products, can capture more of the value chain before goods leave the country.
Establishing political stability and further trade liberalisation inside and outside of Africa are key to helping attract the capital investment necessary to doing so.
Improve the Business Environment
South Sudan can unlock investment and drive economic diversification by creating a predictable, transparent, and efficient environment for businesses.
This starts with ensuring political and economic stability through consistent enforcement of laws, protection of property rights, and effective conflict resolution. Streamlining bureaucracy by simplifying licensing procedures and digitising government services is necessary to reduce costs and delays for entrepreneurs. Introducing clear, business-friendly regulations and fair tax policies can encourage both domestic and foreign investment. Upgrading essential infrastructure, including electricity, transport corridors, and internet, will lower operational costs and open up new opportunities in manufacturing, agro-processing, and services.
Together, these measures would attract new industries and investment while stimulating domestic economic activity.
Conclusion
The direct economic effect of the American tariff on South Sudan is small, but the strategic signal is significant. The US market is becoming less accessible for South Sudan’s young economy which is still developing its trade capacity. It does, however, come as a clear warning to diversify exports, upgrade production, and strengthen regional ties.
In a world where protectionism is rising, smaller economies like South Sudan must be ready to compete harder for market access or risk being left behind.
John Mustapha Kutiyote is and IATP Fellow and Executive Director of Organisation for Liberty and Entrepreneurship (OLENT) in South Sudan.
South Sudan is the world’s youngest nation, having gained independence in 2011. Since then, its economy has been heavily dependent on oil. But for a small but growing group of traders, leather good producers, and resource-reliant businesses, new American tariffs represent a significant setback.
Background
In a recent policy shift, the US announced a 10% tariff on goods from several African countries, including South Sudan. This move is part of President Donald Trump’s “reciprocal tariffs” initiative will make niche exports like leather goods and Arabic gum slightly more expensive in the US market.
Since gaining independence in 2011, South Sudan has relied almost entirely on oil exports, which account for about 98% of its export earnings. Political instability, high inflation, and weak infrastructure have deterred investment in manufacturing, leaving the country dependent on imports.
Trade with the US in goods is minimal. In 2024, US goods imports from South Sudan totalled only $0.8 million, while goods exports to South Sudan reached $59.3 million, resulting in a US trade surplus of roughly $58.5 million.
A tariff is essentially a tax on imported goods, designed to make them less competitive compared to domestic products. While the financial effect on South Sudan may be modest given the low trade volume, the policy’s broader implications could be more significant.
Impact on South Sudan
With such a small export base to the US, the short-term overall hit to South Sudan’s economy will be limited. However, for industries that currently attract American consumers, the loss of competitiveness could be fatal. For example, a South Sudanese leather handbag which might currently retail at $100 would now sell for $110 in the US.
For niche consumer goods like handbags, South Sudanese exporters are already up against much larger-scale, mass producing competitors. In these circumstances, a $10 increase can make all the difference. With most South Sudanese incomes ranging from under $1 to just under $3 per day, losing a single sale to US markets can have significant implications for people whose livelihoods are exposed to the new tariffs.
The new tariffs will also impose a new barrier to South Sudan diversifying its resource exports. As well as oil, resources like Arabic gum, a key ingredient in soft drinks, pharmaceuticals, and cosmetics which South Sudan hopes to grow, may face reduced access to the American market.
However, new tariffs may present an opportunity for South Sudan Arabic gum exporters. US imports of the product from Sudan have fallen significantly in recent years, while nearby Chad, a significant source of US Arabic gum imports, faces a higher 15% tariff. Given the circumstances, it is possible that South Sudanese Arabic gum may be more competitive for US markets because of President Trump’s trade policies.
But this is one of the few potential opportunities from the new tariffs. Like many other African countries, South Sudan is working to attract foreign investment for its export industries and new trade barriers make that already difficult task even more of an uphill climb.
Recommendations
Diversify Export and Import Markets
South Sudan can respond to new trade disruption and strengthen its economic resilience by reducing its dependence on a narrow set of trading partners. Diversification should involve both expanding the range of products traded and broadening the number of international partners.
This includes tapping into regional opportunities through the African Continental Free Trade Area (AfCFTA) and the East African Community (EAC), enabling greater access to neighboring markets such as Kenya, Uganda, Ethiopia, and the Democratic Republic of Congo. Uganda, Kenya, Sudan, and Rwanda are four of South Sudan’s top five import sources and make up just over 2/3rds of South Sudan’s total imports, highlighting the need for deeper intra-African trade.
Beyond Africa, South Sudan should actively pursue trade and investment partnerships with the People’s Republic of China, Singapore, the European Union, and emerging economies in Asia and the Middle East. Targeting niche and high-value markets such as organic agricultural goods in Europe, processed foods in the Gulf, and refined oil products in Asia can help South Sudan capture higher returns and reduce vulnerability to commodity price fluctuations.
Reduce Barriers to High-Value Exports
To boost profitability and reduce vulnerability to trade barriers, South Sudan should address barriers to high value-added manufacturing which would reduce reliance on raw material exports in the long run.
For oil, this means investing in local refining to supply fuels, lubricants, and petrochemicals for both domestic and export markets, while developing petrochemical industries to manufacture plastics, fertilizers, and solvents.
In agriculture, crops such as sorghum, maize, sesame, gum arabic, and livestock yield higher returns if processed before export. For minerals, local smelting and refining, as well as producing jewelry or semi-finished products, can capture more of the value chain before goods leave the country.
Establishing political stability and further trade liberalisation inside and outside of Africa are key to helping attract the capital investment necessary to doing so.
Improve the Business Environment
South Sudan can unlock investment and drive economic diversification by creating a predictable, transparent, and efficient environment for businesses.
This starts with ensuring political and economic stability through consistent enforcement of laws, protection of property rights, and effective conflict resolution. Streamlining bureaucracy by simplifying licensing procedures and digitising government services is necessary to reduce costs and delays for entrepreneurs. Introducing clear, business-friendly regulations and fair tax policies can encourage both domestic and foreign investment. Upgrading essential infrastructure, including electricity, transport corridors, and internet, will lower operational costs and open up new opportunities in manufacturing, agro-processing, and services.
Together, these measures would attract new industries and investment while stimulating domestic economic activity.
Conclusion
The direct economic effect of the American tariff on South Sudan is small, but the strategic signal is significant. The US market is becoming less accessible for South Sudan’s young economy which is still developing its trade capacity. It does, however, come as a clear warning to diversify exports, upgrade production, and strengthen regional ties.
In a world where protectionism is rising, smaller economies like South Sudan must be ready to compete harder for market access or risk being left behind.
John Mustapha Kutiyote is and IATP Fellow and Executive Director of Organisation for Liberty and Entrepreneurship (OLENT) in South Sudan.
John Mustapha Kutiyote