The full impact of the U.S. President Donald Trump administration’s controversial foreign trade tariffs and aid cuts is still unravelling. Yet, the same government plans a 5% tax on Diaspora remittances, which will hurt millions of households in struggling economies around the world.

Love or hate him, Trump has made himself a larger-than-life, enigmatic brand in international affairs, and those who choose to ignore or underestimate him often do so at great peril.

Like COVID-19, which struck him in October 2020, despite his denial of the virus during his first presidency, America’s 45th president (2017-2021) and 47th (January 2025 to date) is as unpredictable as the British weather, devastating as the Japanese Tsunamis and tempestuous as the American hurricanes.

Better known as a real estate businessman and The Apprentice TV reality show celebrity, Trump captured the world’s imagination with his dramatic entry into politics a few years before America’s 2016 elections.

Shattering predictions by professional pundits and poll stars, he won the presidency that year, apparently to his own surprise, too.

Waxing in his unorthodox views and methods, Trump is not the typical politician, but has mastered how to beat the system, and gets away with actions, conspiracy theories and statements that have put many in trouble or in jail.

If he taught professional politicians a few lessons during his first term, his second term, which was 100 days old on 30th April, is already very eventful, characterised by controversial domestic and foreign policies and interventions ranging from the Russia-Ukraine war to the Israel-Hamas conflict and alleged mistreatment of Whites in South Africa.

The Trump administration proposes scrapping UN peacekeeping funding and threatens some of the UN’s critical agencies with suspending financial support.

The government has also toyed with ‘Making Canada, America’s 51st State’ and taking the Panama Canal, to rename it the ‘Gulf of Mexico.’ These are drastic measures with potential far-reaching implications.

Hidden on page 327 of what the U.S. House Republicans are hailing as “the one, big, beautiful bill,” President Trump’s proposed 5% Tax on Remittances is contained in the House Ways and Means Committee’s controversial tax plan, targeting electronic money transfers that have increasingly, helped fund investments, basic needs, and propped up economies worldwide.

The tax is estimated to affect 40 million people, including green card holders and individuals with H-1B, H-2A and H-2B visas. U.S. citizens are exempted.

It would be implemented through financial institutions and money transfer service outlets at the point of transaction, regardless of the amount or purpose of the transfer.

According to its supporters, the bill aims to make the 2017 Tax Cuts and Jobs Act permanent, while increasing the standard deduction and extending the child tax credit, among other objectives.

This follows the Republican Party’s anti-illegal immigration stance, and attempts to increase tax revenue and reshape American trade relations with the rest of the world.

Political analysts predict that, should the House of Representatives pass the 5% tax bill by May 25th as anticipated, it could be signed into law by early July.

According to The Financial Express, quoting a World Bank Report, India, the world’s top recipient of remittances, with about USD$83 billion annually, mainly from the United States, is expected to be worst hit by the 5% American tax.

Cumulatively, Africa, in 2023, received about USD$100 billion in remittances – nearly 6% of its Gross Domestic Product (GDP), underscoring the important role the remittance funds play in supporting families and contributing to sustainable economic growth on the continent.

The same report showed that ‘Diaspora remittances’ surpassed Foreign Development Investment (FDI) at USD$48 billion, and Official Development Assistance (ODA) at USD$42 billion, highlighting the significant impact of remittances on Africa’s economic landscape, with some 40.4 million Africans said to be living and working abroad as of 2022.

Jones Amegbor, of the PayInc Group, was quoted as saying the 5% levy could ‘unravel years of work’ that fintechs have achieved in streamlining Cross-Border financial transactions.

“We have worked hard to build trust, reliability, and formal rails that protect senders and recipients alike. One can only hope that clearer heads prevail and this bill falls swiftly,” he added.

The 10 African countries with the highest diaspora remittances in 2024 were:

Rank Country Remittances in USD$
1 Egypt 22.7 billion
2 Nigeria 19.8 billion
3 Morocco 12.0 billion
4 Kenya 4.8 billion
5 Ghana 4.6 billion
6 Senegal 3.0 billion
7 Zimbabwe 3.0 billion
8 Zambia 2.8 billion
9 Uganda 1.49 billion
10 DR Congo 1.3 billion

Egypt topped the list, with USD$ 22.7 billion, primarily from its Diaspora in the Gulf, Europe, and North America.
Nigeria followed with USD$19.8 billion, mainly contributions from its diaspora communities in the U.S. and the U.K.

Morocco, Kenya, and Ghana completed the top five, with USD$ 12 billion, USD$ 4.8 billion, and USD$ 4.6 billion, respectively, showing strong support from their global diaspora population.

According to the World Bank Report 2023, remittances play a critical role in bolstering economic stability and household incomes in low- and middle-income nations, steadily surging by 57%, while FDI has declined by 41% in the last decade.

Nearly 25 countries globally rely heavily on remittances, which account for over 10% of their GDP, according to the report.

In 2023, Nigeria, one of Africa’s largest economies, accounted for 38% of remittance flows to the region, indicating a growth of 2%, while Ghana and Kenya recorded increases of 5.6% and 3.8%, respectively.

The pull and push factors driving Africans’ migration abroad include the pursuit of better employment and education prospects, higher incomes, and greater economic and political stability.

Economic experts believe that this trend is expected to continue, driven by migration dynamics, including income disparities, and the impacts of climate change, all adding to migration pressures.

The Trump administration’s proposed 5% tax will take a huge toll on the vital economic lifeline and source of external funding for Africa from its migrant workers at a time when financial experts are advocating for a reduction in existing charges.
The situation could even get worse should other countries follow the American example.

Trump and his cult supporters are within their rights to pursue the ‘America First’ or ‘Make America Great Again’ agenda. Yet the disruptive and inconsiderate policies from a country that preaches justice and equal opportunities seem to be promoting inequality and an unfriendly global ecosystem.

Labour migration is a global phenomenon as old as human existence. While the Trump administration is laser-focused on curtailing or stopping irregular migration, legitimate migrants in America should not be subjected to multiple taxation or unfair financial treatment as they struggle to live a decent life and cater to their families back home after paying their dues in their host country.

Diaspora remittance is not aid. The funds from legitimate earnings by foreigners in America should not be jeopardised by the Trump government’s tax revenue-chasing policy.

Meanwhile, despite the optimism of GOP leaders, the controversial tax bill has run into a storm in Congress with some representatives opposing cuts to services they consider essential to their constituents, including Medicaid.

Unsurprisingly, Trump has angrily snapped at lawmakers refusing to back the bill.

“Not only does it (the bill) cut taxes for all Americans, but it will kick millions of Illegal Aliens off of Medicaid… The Country will suffer greatly without this legislation… It will be blamed on the Democrats, but that doesn’t help our voters. We don’t need ‘grandstanders’ in the Republican Party. Stop talking, and get it done,” the maverick president posted on his Truth Social platform.

The jury is still out on the controversial bill.

But its opponents expect well-meaning Americans, especially fair-minded lawmakers across the aisle in Congress, to ensure that the anti-Diaspora aspects are removed; they would not only hurt the Diaspora communities but also their families and countries.

Paul Ejime Is A Media/Communications Specialist And Global Affairs Analyst