Transmission Effect of Uncertainties in USA & China Trade Spat on West Africa Trade Relationships

We investigated the transmission effects of the trade spat between the United States and China on the relative trade openness of the West African sub-region. We found that economic policy uncertainty in China positively and significantly influence relative openness and the trade war is a positively significant driver of relative openness of the West African economy to China unlike the United States, with no significant influence in the short run, but a relative elasticity of 32% in the long run of openness to the trade war. The speed of adjustment as shown by the error correction representation is faster in openness to China than it is for the United States. As the economies of the West African sub-region appear vulnerable to the trade war and uncertainties in the United States and China, it is expected that deliberate policy mitigants be put in place to cushion the transmission effects of the trade war.