Why U.S trade war poses bigger risks to SA than just AGOA suspension
The agricultural and automotive sectors are likely to be of the industries hardest hit by Trump's latest threat of tariff hikes.
President-elect Donald Trump greets Elon Musk as he arrives to attend a viewing of the launch of the sixth test flight of the SpaceX Starship rocket on November 19, 2024 in Brownsville, Texas. Picture: AFP
Stephen Grootes speaks to Peter Worthington, Senior Economist at Absa CIB about the U.S administration's trade policies and their potential risks to South Africa's economy.
Listen to the interview in the audio player below.
Global markets took a tumble on Monday off the back of U.S president Donald Trump's announcement that new tariffs which he's set to announce on Wednesday will impact all countries around the world.
South Africa has also faced direct threats and actions from the American leader, imposing harsh penalties and sanctions over claims of land grabs against white farmers in the country.
South Africa could potentially also be kicked out of the African Growth and Opportunity Act (AGOA), which is a piece of legislation aimed at assisting the economies of sub-Saharan Africa and to improve economic relations between the United States and the region.
Speaking to Stephen Grootes on The Money Show, Peter Worthington, senior economist at Absa CIB says the tariffs are going to have a major impact on several industries, most notably the agriculture and automotive sectors.
"We've already been hit with some really large tariffs coming through on our export of autos and metals. And also threats of reciprocal tariffs, and those could be quite damaging for South Africa's food & beverage exports..."
- Peter Worthington, senior economist - Absa CIB
"This idea that President Trump has that he's going to charge and eye-for-an-eye tariff. We obviously have higher tariffs on our food and wine exports than the U.S charges, so reciprocal tariffs would hit that industry hard."
- Peter Worthington, senior economist - Absa CIB
"Motor vehicles, 25%. That's tough for our manufacturers. And it's particularly tough because every other motor vehicle exporting country in the world is going to be faced with the same tariffs. So it won't be easy for out motor manufacturers to find new expert markets because competition will be increasing."
- Peter Worthington, senior economist - Absa CIB
Scroll to the top of the article to listen to the full interview.