Interesting times ahead as US trade policy unfolds

While the Trump administration's tariff war will have a global impact, local factors will largely determine the outlook for South African agriculture, writes Dr Koos Coetzee.

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Trumponomics is becoming a buzzword. We do indeed live in interesting times and since his election, US President Donald Trump has made some shocking announcements.

This began with increased tariffs on imports from China and Canada in February, and the real shocker came with the 2 April announcement of huge tariffs on imports from various countries – including a 30% tariff on South African exports to the US.

A recent article in Harvard Business Review points out that while the US engages in a tariff war on all other countries, individual countries only have to contend with higher tariffs from the US. Therefore, the US is at a huge disadvantage.

NOT TOO GLOOMY FOR SA FARMERS

Market reactions suggests increased tariffication is probably not the correct way to ‘make America great again’.

The US's action has already led to other countries imposing higher tariffs, limiting trade and negatively affecting global economic growth.

With the exception of some specific industries like citrus fruit – particularly Western Cape citrus producers, who send 20% of their exports to the US – this is unlikely to have a major direct impact on South African agriculture.