SA faces turbulent economic outlook, rising inflation as US tariffs wreak havoc

President Trump unveiled a 10% tariff on all imports, with higher rates for countries with trade surpluses

- SIPHELELE DUDULA

THE hefty tariffs imposed by the US President Donald Trump on imports to the world's largest economy left a trail of turmoil on global financial markets, with the JSE All Share index plunging 3.4% to 86 061 index points, its worst performance in more than a month.

President Trump on Wednesday unveiled a 10% tariff on all imports, with significantly higher rates for countries with trade surpluses - 30% for South Africa, 34% for China, and 20% for Europe.

Investec chief economist, Annabel Bishop, said financial markets have had a massive negative reaction and further volatility was likely on adjustment, either “up” or “down” causing uncertainty to persist.

“With the 30% tariff, and expected to lose its US legislated Agba benefits, SA vehicle exports are expected to be impacted along with those agricul-ture in particular, and with the uncer-tainty implications on overall SA goods will suffer,” Bishop said.

“There are some heightened risks for US recession, inflation and fewer US interest rate cuts this year. Rather, we would add to SA inflation as we expect the rand will pull back further still.”