Calls for diversification of export markets

ECONOMIC experts believe South Africa needs to diversify its export markets and strengthen trade relationships with other countries.

- TASCICA PILLAY

This is after US President Donald Trump announced additional tariffs on all imported products under what has been termed "Liberation Day" trade measures. Goods imported from dozens of countries and territories are now going to be taxed for shipping after America, including South Africa.

Trump slapped several countries across the world with tariffs ranging from 10% to 30%, which will be effective from April 10.

The US is South Africa's largest destination for South African automotive exports, with approximately R35 billion worth of vehicles shipped last year, accounting for 64% of total vehicle exports.

The proposed 25% tariff increase will severely impact local manufacturers operating in South Africa, including BMW, Ford, Isuzu, MercedesBenz, Nissan, Toyota, and Volkswagen - which produce vehicles for global markets, including the US.

Dr Nokotozo Nzimande, senior lecturer at the University of Johannesburg in the Department of Economics said the decision to impose the tariff will affect competitiveness.

"We can expect the amount of exports to decline and this will affect the economic growth. We have to revamp economic growth further down. Our economy is not performing and therefore cannot generate enough jobs.

"The reduction in exports will result in a reduction in production because they will not be able to access US markets like they used to. Some small firms will struggle to cope and may shut down," said Nzimande.

He said South Africa should also see this as an opportunity to diversify and access other markets to supply their goods.