New Trade Order: Maghreb's Losers & Stragglers in Trump's Tariff War

By Gavin Serkin

If there are no winners in a trade war, there are certainly least losers.

As the smoke clears from President Trump's scatter gun assault on the world, the Maghreb appears a fundamentally altered and uneven landscape. For some countries, the fallout has torn open structural fissures in already vulnerable economies. Yet others, while bruised, have space to reconfigure and even position themselves to absorb displaced production and trade from their less fortunate neighbours.

Morocco: The Least Loser

Morocco emerges as the least scathed in the region.

Cushioned by a Free Trade Agreement with the U.S. since 2006, Morocco’s diversified export strategy has propelled phosphates and textiles to automotive parts into American markets for decades. In 2023, the U.S. imported $1.4 billion worth of Moroccan goods, with automotive components and aerospace parts leading growth. Automotive exports alone increased by 17% year-on-year, accounting for nearly 45% of Morocco’s total goods shipped to the U.S. In second place, aerospace exports—bolstered by firms like Safran and Boeing suppliers in Casablanca’s Midparc zone—grew by 11%, reflecting Morocco’s expanding footprint in high-tech manufacturing.

The 10% tariff levied against Morocco, while a setback, still positions Moroccan goods at the lowest tier available in Trump's New Trade Order—and prices its exports far more competitively than those from Algeria or Tunisia. Morocco could be the closest thing to a trade war winner if it seizes the opportunity to act as a trade bridge to the U.S. for companies shifting production away from higher-tariff regions.

The automotive sector could lead the way. Renault and Stellantis factories in Tangier and Kenitra serve European Union and African markets, insulating them from U.S. tariffs. The Moroccan Association for Automotive Industry reported over 580,000 vehicles produced in 2023 alone—outpacing South Africa and elevating Morocco to Africa’s largest vehicle exporter.

The country’s emerging EV and battery sector is another key leader. Chinese battery maker Gotion High-Tech is investing $6.4 billion to create a Moroccan gigafactory—Africa’s largest—positioning the kingdom as a cost-effective, strategically located alternative to both China and Eastern Europe. With Europe phasing out combustion engines by 2035, Morocco’s proximity (14km from Spain) and labour costs 40% lower than in Eastern Europe make it indispensable. Though Trump’s 10% tariff applies to batteries, Moroccan exports still undercut U.S.-made alternatives by approximately 20%, analysts estimate.

Could Morocco's relative insulation from U.S. tariffs attract production from elsewhere on the continent? South Africa, the continent’s most established auto manufacturing hub, now faces 30% U.S. tariffs—undermining its historic advantage in exporting high-value vehicles and components. Toyota, BMW, and Ford—all of which operate in South Africa—must now weigh Morocco’s 10% tariff and lower corporate tax rate (14% vs South Africa’s 27%) against higher shipping costs and a less mature supplier ecosystem.

While South Africa’s infrastructure and technical know-how remain world-class, the growing cost differential may prompt multinational firms to consider shifting production lines northward. Morocco’s proximity to Europe, stable trade agreements, and expanding port and logistics capabilities—such as Tanger Med, Africa’s largest port—add to its appeal.

Beyond EVs, Morocco’s role as a low-tariff, stable manufacturing platform could attract inflows in textiles, agri-processing, and electronics—industries where Tunisia and Egypt once competed more closely. Already, local firms are repositioning to absorb future flows: Tanger Med port is expanding with new terminals aimed at transatlantic shipping.

Algeria: Diversification Setback

For Algeria, the 30% U.S. tariff deals a major blow—not to its oil and gas exports, which remain largely unaffected, but to its fragile non-hydrocarbon sectors. Oil and gas still account for 95% of export earnings. However, non-energy exports like dates, cereals, and pharmaceuticals—sectors that had begun targeting the U.S.—are now uncompetitive.

According to the Algiers Chamber of Commerce, the tariff could wipe out $200 million in annual trade with the U.S., representing more than half of Algeria’s total non-hydrocarbon exports to the American market in 2023. The dinar has dropped 15% since January, reflecting mounting market anxiety. Ratings agencies now warn of heightened default risk, as foreign reserves have fallen 40% since 2019.

State oil company Sonatrach has already begun pivoting eastward, signing energy development deals with China’s Sinopec and Russia’s Rosneft. Yet these new alignments are no substitute for access to U.S. technology and capital. Meanwhile, efforts to expand tourism, agribusiness, and light manufacturing face setbacks.

With youth unemployment at 26% and inflation nearing 9%, the new tariffs risk exacerbating social unrest. Protest movements like Hirak have left the government under pressure to deliver economic results. Proposed retaliatory tariffs on U.S. machinery and pharmaceuticals would likely backfire, harming Algerian firms reliant on foreign inputs.

Tunisia: Fragile Gains at Risk

Like Algeria, Tunisia had only just started building momentum in high-value exports—particularly textiles and olive oil—when Trump’s 28% tariff undercut its prospects. These are low-margin products, and such a steep tariff renders them nonviable in the U.S. market. Tunisia’s olive oil exports, which surged 33% year-on-year to reach nearly $190 million in 2023, are now likely to divert toward the EU, saturating markets and depressing prices amid increased supply.

The textile industry, accounting for over 30% of Tunisia’s manufacturing jobs and 20% of total exports, also faces existential threats. Manufacturers had been eyeing the U.S. as a growth market beyond Europe. But without trade preference programs like the African Growth and Opportunity Act (AGOA), Tunisian apparel now competes at a ruinous disadvantage.

Stock market losses and currency volatility in Tunis underscore investor concern. The government is weighing diplomatic appeals and closer trade alignment with the EU and Gulf, but with limited leverage and growing fiscal strain.

Tunisia may attempt to reposition itself as a Francophone services hub, catering to back-office operations for European firms. However, political instability and lack of reform remain obstacles to attracting long-term investment.

Libya: Marginal but Symbolic

Libya’s 31% tariff is largely symbolic as U.S. trade is negligible and political instability makes investment unlikely. Nevertheless, the move serves to stigmatise Libya in global trade diplomacy. Should the country stabilise, overcoming this tariff barrier will be another hurdle to re-entering the global economy.

Mauritania & The 10 Percenters

Like Morocco, Mauritania faces a 10% tariff. And like Libya, minimal trade with the U.S. makes this largely symbolic. However, conversely to the situation for Libya, parity in treatment to the favoured ‘10 percenters’ could make Mauritania more attractive for niche investment. Its resource-based economy—focused on iron ore, fisheries, and gold—stands to benefit from future supply chain diversification, especially if geopolitical tensions elsewhere shift investor focus.

Realising this opportunity will depend on infrastructure upgrades and regulatory improvements. For now, Mauritania remains largely outside the spotlight.

Stock Market Reaction

So far, national stock indexes across the region have responded in unison. The Casablanca stock index (MASI) dropped over 2.3% following the tariff announcements, with automotive and industrial stocks leading declines. Yet, differentiators are emerging amongst individual stocks: mining firm Managem and Renault partner Auto Nejma, for example, posted gains of 4% and 3%, respectively, as investors bet on sector resilience.

In Tunisia, the impact was overall more severe. Apparel exporters saw immediate valuation drops, while the broader market reflected mounting anxiety over trade access. Algeria’s small and illiquid bourse showed only marginal reaction, but the real pain will be evident in upcoming trade and fiscal data.

Companies are now recalibrating. Moroccan exporters are targeting higher volumes to Europe and marketing their preferential U.S. tariff status. Tunisian firms are lobbying for relief and exploring workarounds through third countries, though rules of origin complicate such efforts. Algerian businesses are doubling down on eastward trade ties.

Morocco vs. South Africa

Trump’s tariffs may mark a turning point in Africa’s industrial geography. South Africa’s auto sector exports 300,000 vehicles annually to the U.S., mostly under AGOA. With a 30% tariff now in place, that model is under threat.

Meanwhile, Morocco produced over 580,000 vehicles in 2023, outpacing South Africa and cementing its position as the continent’s top car exporter. With $14 billion in automotive exports last year—up 22% from 2022—Morocco is increasingly seen as a more efficient, tariff-shielded alternative for serving both European and American markets. BMW and Mercedes, already present in Morocco, could expand Moroccan operations to supply both EU and U.S. markets. Morocco’s lower corporate tax rate, skilled labour pool, and strategic location are powerful draws.

Diplomatic Undercurrents and Realignment

The tariff regime is as much a diplomatic signal as an economic one. Morocco’s alignment with Western priorities—including security cooperation, support for Israel normalisation, and trade openness—likely contributed to its lighter treatment.

By contrast, Tunisia and Algeria—both more neutral and slower to liberalise trade—have been hit harder. Notably, Israel was assigned a 20% tariff, higher than Morocco’s 10%, despite its close strategic ties to Washington. This suggests that the recalibration is less about loyalty and more about perceived trade imbalances and a broader reassertion of American economic leverage.

The result may be a bifurcation: Morocco doubling down on its Western-aligned strategy, while Algeria pivots further toward China, Russia, and regional blocs like BRICS. Tunisia seems destined to straddle the middle, seeking deeper integration with the EU and Gulf.

This fragmentation could hinder long-standing goals for Maghreb integration. The Arab Maghreb Union, already largely dormant, may find its revival efforts further complicated by competing trade orientations.

Divergence Defined by Diplomacy

Trump’s tariffs may be designed as economic levers, but in the Maghreb, the consequences run deeper. Morocco stands to capitalise on its foresight and global integration. By contrast, Tunisia and Algeria are forced to reckon with the cost of limited trade liberalisation and inconsistent diplomatic engagement with key global partners.

A region already deeply fragmented now risks entrenching new divisions.

*Gavin Serkin is the author of Frontier: Exploring the Top Ten Emerging Markets of Tomorrow, and a Journalist and Consultant on emerging & frontier markets, with particular focus on Africa and the Middle East