{"id":830629,"date":"2025-07-07T09:38:10","date_gmt":"2025-07-07T07:38:10","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=830629"},"modified":"2025-07-07T09:39:29","modified_gmt":"2025-07-07T07:39:29","slug":"another-disaster-for-south-africa-3","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/830629\/another-disaster-for-south-africa-3\/","title":{"rendered":"Another disaster for South Africa"},"content":{"rendered":"\n

United States President Donald Trump has threatened to intensify and exacerbate punitive tariffs on countries aligned with BRICS, saying he will apply an additional 10% tariff on them.<\/p>\n\n\n\n

Trump took to his Truth Social platform on Monday (7 July) and posted the threat.<\/p>\n\n\n\n

“Any country aligning itself with the anti-American policies of BRICS will be charged an additional 10% Tariff. There will be no exceptions to this policy,” he said.<\/p>\n\n\n\n

This comes as South Africa is trying to negotiate a trade deal with the United States, ahead of the expected reintroduction of Washington’s “reciprocal” tariffs announced in April.<\/p>\n\n\n\n

On 2 April, Trump announced a global tariff structure based on trade deficits with the United States. This included a 31% tariff on South Africa.<\/p>\n\n\n\n

While the tariffs were expected to come into effect on 9 April, Trump paused them for 90 days\u2014a hold that is expected to end this week.<\/p>\n\n\n\n

In the interim, the United States reverted to a flat universal tariff of 10%, in addition to a 25% tariff on the automotive sector.<\/p>\n\n\n\n

Delegations from South Africa have been working with counterparts from the US to negotiate a trade deal between the two countries to escape the looming 31% tariff.<\/p>\n\n\n\n

However, with no deal signed as yet and the threat of an additional 10% for BRICS-aligned countries, South Africa now faces an impending disaster.<\/p>\n\n\n\n

The BRICS group of emerging-market nations \u2014 the acronym for Brazil, Russia, India, China and South Africa \u2014 expanded in 2024 to include Iran, the United Arab Emirates, Ethiopia and Egypt.<\/p>\n\n\n\n

Many countries in the bloc are seen as being enemies of the United States, with extremely strained relations between the US and Russia, China and Iran, in particular.<\/p>\n\n\n

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South Africa has also drawn the ire of Trump’s administration this year, with the country being a surprising target of many direct policy shots, including accusations of human rights abuses.<\/p>\n\n\n\n

The US president previously threatened the BRICS bloc with a 100% tariff if it moved forward with any plans to ditch the US dollar and adopt a new currency in bilateral trade.<\/p>\n\n\n\n

This provoked a response from the bloc<\/strong><\/a>, dismissing any claims or indications that the countries were moving towards a new unified currency.<\/p>\n\n\n\n

However, the bloc has been discussing ‘de-dollarisation’ since 2023, with countries like India and China encouraging the use of local currencies in trading.<\/p>\n\n\n\n

Regardless, the bloc\u2019s New Development Bank continues to rely on the dollar for its investments, which have exceeded $30 billion in member states and other developing economies.<\/p>\n\n\n\n

South Africa’s tariff disaster<\/h2>\n\n\n
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DTIC Minister Parks Tau is trying to get South Africa a deal<\/em><\/figcaption><\/figure><\/div>\n\n\n

If South Africa does not secure a trade deal with the United States, or at the very least get an extension on the reciprocal tariff pause, the country stands to suffer significant losses.<\/p>\n\n\n\n

The US has indicated that a three-week extension for some countries may be on the cards; however, there is no confirmation that South Africa is among those being considered.<\/p>\n\n\n\n

With an additional 10% slapped onto the 31% reciprocal tariff, South Africa risks facing a 41% general tariff, and its auto sector would suffer more hardship with a cumulative 66% tariff.<\/p>\n\n\n\n

Analysts have noted that the reciprocal tariff alone would wipe out the complete benefit of being a part of the African Growth and Opportunity Act (AGOA), which itself is at risk of ending.<\/p>\n\n\n\n

According to Aluma Capital chief economist Frederick Mitchell, South Africa exported an estimated R71.5 billion through AGOA in 2024<\/strong><\/a>, accounting for 46% of total exports to the US that year.<\/p>\n\n\n\n

One of the largest beneficiaries from a trade point of view is the auto sector, which exported close to R34 billion through the Act in 2024, and has exported well over R100 billion since 2019.<\/p>\n\n\n\n

However, with Trump’s tariffs, this would effectively be wiped out.<\/p>\n\n\n\n

The tariffs would also damage South Africa’s agriculture and iron and steel industries, resulting in economic loss, job losses, and ripple effects on secondary and tertiary industries.<\/p>\n\n\n\n

The Department of Trade and Industry and Competition (DTIC) said in June that it had presented a new trade framework to Washington counterparts to mitigate this impending disaster.<\/p>\n\n\n\n

The department said the framework addressed US concerns relating to non-tariff barriers, trade deficits, and commercial relations through two-way procurement or import of strategic goods.<\/p>\n\n\n\n

It proposed exempting key South African export products, including autos, auto parts, and steel and aluminium, from US duties through tariff rate quotas.<\/p>\n\n\n\n

However, South Africa wants to keep the maximum tariff application of 10% at worst\u2014something that may not be possible with Trump’s latest take on BRICS.<\/p>\n","protected":false},"excerpt":{"rendered":"

US President Donald Trump has threatened yet another tariff that could hit South Africa on top of the looming 31% reciprocal tariff that may be implemented this week.<\/p>\n","protected":false},"author":10,"featured_media":814826,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[10849,18089,5056],"class_list":["post-830629","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-donald-trump","tag-dtic","tag-tariff"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/830629","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=830629"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/830629\/revisions"}],"predecessor-version":[{"id":830637,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/830629\/revisions\/830637"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/814826"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=830629"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=830629"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=830629"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}