US Tariff Hike 'About Power'

Argument: SA Imposes Unfair Restrictions on America Is Unfounded – Experts

- Ina Opperman

Here is not really much new about US President Donald Trump's tariff of 30% that will be levied on all goods imported into the US from South Africa, as it is not so much about trade as it is about power, according to economists.

Trump confirmed the move in a White House letter to President Cyril Ramaphosa and also hinted that a new trade deal could be reached before next month.

Neva Makgetla and Nokwanda Maseko, senior economists at Trade and Industrial Policy Strategies, said there is nothing different from the previous tariff announced in April/May, which reflects a notoriously flawed methodology that has very little to do with the real world.

"In practice, South Africa, like the rest of the world, has already been hit by 25% tariffs on autos, which affect the largest South African export to the US apart from mining products," they said.

"This is perhaps less about trade and more about a show of power. The argument that South Africa imposes unfair trade restrictions on the US is unfounded. If it were, South Africa might have been excluded from the African Growth and Opportunity Act years ago."

Mikel Mabasa, CEO of the Automotive Business Council, said they are still reviewing the letter and talking to members before he will comment.

Just after the first announcement in April, Mabasa said the US is the third-largest destination for South African automotive exports, with about R35 billion worth of vehicles shipped in 2024, accounting for 6.5% of total vehicle exports last year.