US tariffs threaten South Africa's economic growth and job market

HIGH tariffs imposed by the US on South African exports from August 1 will be a blow that will further de-industrialise South Africa, kill economic growth, and cause further unemployment, Efficient Group chief economist Dawie Roodt said yesterday.

- EDWARD WEST

Speaking in an online discussion held by the Motor Industry Staff Association of South Africa (MISA) about the US's plans to resume its threat of 30% import tariffs for South African goods, Roodt said the tariffs will result in lower investment into South Africa and will impact manufacturing and agriculture particularly, sectors that are among the most capable of growing job opportunities in the country.

He said while South Africa's participation in the US's Africa Growth and Opportunity Act (Agoa) later this year was not formally over and uncertain - Agoa allows duty-free access to the US market for eligible sub-Saharan countries - the new tariffs effectively meant this prospect was unlikely, as the new tariff structure could not coexist with the benefits of Agoa.

In addition, Agoa had the protection of property ownership rights as a condition of membership, which South Africa could not meet due to its Land Expropriation Act. South Africa was viewed as a medium-income country, and the Act was for less developed economies. “We need to accept that Agoa is dead,” he said.

He said, however, that by appearances, US President Donald Trump's door was always open for further negotiation on the tariffs, but that the US appears to be seeking political concessions from the South African government.

These likely included changing its outlook on BEE, on land expropriation, and on Israel and Iran, with much of the government's current views on these matters based on “political grandstanding,” said Roodt.