SA must ride on the new trade winds
Analysts say now is the time for South Africa to remain on good terms with the rest of the world.
The barrage balloon of hot air that is Donald Trump appeared to undergo a significant loss of bombastic pressure this week, backing down in two key areas where he had previously been spitting fire and brimstone.
As the US markets tanked – and those around the world followed suit over his outrageous threatened tariffs of up to 245% on Chinese products – he walked back considerably, promising to 'go easy' on Beijing and that the final tariffs would be much lower than what he originally pitched.
Then he softened his rhetoric about Federal Reserve Bank chair Jerome Powell, who said the tariffs would damage the US economy, which drew a threat from Trump to fire him.
Markets responded positively to those developments, although they are still far from clawing back the trillions wiped off bourses around the world in the wake of Trump's lunacy.
For us in South Africa – a mere bit player in any global drama – the effects of the tariffs will still be significant because whatever happens, it seems our preferential ride on duties through the African Growth and Opportunities Act (Agoa) is over.
ALSO READ: China risks its moral high ground in escalating trade tensions
That means that whatever we export to the US – from cars to fruit – will become more expensive and less competitive.
That could cost thousands of jobs back at home as profitability is reduced.
Now is the time, though, to remain on good terms with the rest of the world, as agricultural economist Wandile Sihlobo says today, so we can up our exports to places other than America.
Also, as Business Leadership CEO Busiswe Mavuso pointed out, government must put in plans to support our motor industry, for which the US is a major market and will be hard hit when Agoa goes.
If we can see this storm approaching, we need to batten down the hatches.
NOW READ: Ramaphosa treads carefully with Mcebisi Jonas appointment
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