Rand weakens as Trump extends tariffs on emerging economies

President Trump announces additional tariffs on countries aligning with BRICS

- SIPHELELE DLUDLA

THE rand weakened to its lowest in nearly two weeks against the major currencies on Monday as global risk was seen to have escalated following US President Donald Trump's tariff threat.

On Sunday, Trump announced an extension to the tariff deadline, pushing it to the beginning of August while imposing an additional 10% tariff with “no exceptions” on countries aligning with the policies of BRICS—a bloc of emerging economies comprising Brazil, Russia, India, China, and South Africa.

Trump also reiterated previous warnings of imposing tariffs of up to 100% on BRICS nations should they abandon the US dollar in bilateral trade, and further warned other countries against joining the alliance.

The expanded BRICS bloc now encompasses 11 countries, representing 43% of the global population, 32% of the world's land area, and approximately 35% of global GDP, which makes these tariffs even more impactful.

On Monday, BRICS currencies, along with emerging markets, came under pressure.

The rand weakened by 1.15% to R17.79 against the US dollar, 0.9% to R20.90 against the euro, and 0.9% to R24.20 against the British pound, marking its lowest level since June 27.

According to Investec’s chief economist, Annabel Bishop, the rand’s decline was attributed to rising uncertainty surrounding global trade.