SA faces tough trade-off as looming US tariffs threaten jobs, economy
An economist says South Africa could face a tough choice between sticking to its values or protecting its economy.
The crippling 30 percent US tariff on South African products is due to kick in, in a week, unless Washington agrees to a proposal made by our trade authorities.
The implementation of the tariffs has raised concerns about the economic slowdown it may cause, with the Reserve Bank saying it could also put around 100 000 jobs at risk.
Economist Bronwyn Williams, from Flux Trends, says America’s attitude towards South Africa has been shaped by our recent political and geopolitical stances, including our response to conflicts involving US allies.
" Where America sees South Africa as a cooperative trade and political ally, or as a potential wild card that might not be acting in the way that the US would like other countries to act. So this puts us in a really tricky position, but it's a great opportunity, I think, for us to decide whether our values have prices.
READ: ‘Support desk’ launched as SA braces for 30% US tariffs
"Are we prepared to pay those prices? And by paying those prices, we mean paying those prices in terms of real people's jobs and our market competitiveness on the global stage. It is a place that's going to test our sort of moral fortitude and our ability to become really competitive going forward."
Williams says we could be hit in two ways.
" We could lose business in two ways. The one is because our products become really more expensive to our end users, and they can no longer afford to consume as much of our products as they have before. But it's also that we can lose market share to other countries.
"Donald Trump's hoping [that] putting the tariffs in place on other countries will make domestic businesses within the US more attractive to American customers. But there's also the global perspective too, that if we do a less good job of negotiating with America than with our comparative countries and markets that sell the same goods and services that we do, we could end up losing massive market share really."
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