Experts weigh in as SA braces for economic fallout from US tariff increases

INTERNATIONAL markets are in turmoil as US President Donald Trump's tariffs - which have been revised upwards for many countries - come into effect at midnight with a negative spillover effect anticipated for South Africa as the rand flirts with historic lows.

- NICOLA MAWSON

Old Mutual Group chief economist, Johann Els, has also downgraded his South African growth forecast margin, citing slower growth, helping offset investor expectations but does not foresee a local recession unless US-linked events.

“Recent estimate 1.9% for 2025.”

South Africa and Euro Area, South Africa's primary trading partners, are expected to adopt similar regulatory stances, which should help offset lost momentum,” said Els.

Yet, as Donald MacKay, founder and CEO of XA Global Trade Advisors, told IOL from a trade perspective: “It's a storm. The local currency has already been pushed close to a historic low as investors steer away from the high risk, high return, environment of volatile emerging market currencies. The rand is at its lowest level in a month, having dropped to R19.80 around midday on Wednesday and slumping as low as R20.02 on the close.”

On Europe, it has declined 0.38%, with recent drops being the result of uncertain rand local political, given speculation that the US may reassess the Government of National Unity (GNU) as well as the 30% imposition of tariffs on South African goods being exported to the US.