The rand stands rooted

Unpacking its resilience amidst US trade tensions

- FREDERICK MITCHELL

IN A move that initially sent shockwaves through the South African economy, the United States announced a 30% tariff on South African-produced goods entering its market, effective from 7 August 2025.

However, the response of the rand has confounded many market analysts who predicted a prolonged period of weakness.

The rand, which depreciated sharply from approximately R18.50 to R19.74 against the US dollar following the tariff announcement in early April, has since appreciated back to a range of R17.50R17.70 (as at 18 August 2025).

This strength, amidst such trade tensions, highlights an economy that is adjusting to shocks through market foresight and strategic resilience.

Market's 'pricing-in' of tariff impact The early depreciation of the rand was expected, and largely priced into the market.

Investors had anticipated that tariffs would, at least initially, weaken the currency as uncertainty mounted. The fact that the rand has since recovered and strengthened suggests that the markets had already incorporated the potential effects of the tariffs well in advance.

Moreover, the delay of the tariff implementation deadline originally set for 7 August 2025 further cushioned the currency and economic expectations.

The market seems to have recognised that the tariffs, while impactful, were unlikely to devastate South Africa's current economic trajectory.