A delayed but uncertain threat
While the 30% tariff announcement appears final, it may still be a political tactic. Trump has twice postponed the implementation of tariffs - first from April to July, and now to 1 August. This suggests that the delay could be a negotiation strategy, aimed at pressuring SA into compliance without having to impose the tariffs at all.
“I suspect he’s buying time to negotiate,” says Future Forex CEO, Harry Scherzer, “but if those negotiations fail, the tariffs could hit hard.”
Sector-specific exemptions? No clarity yet
There’s been no clarity from the Trump administration about whether sectoral exemptions will apply, or how this will affect AGOA (the African Growth and Opportunity Act), which currently facilitates preferential trade between the US and sub-Saharan African countries.
This lack of detail reinforces the view that the tariff threats are more about leverage than logistics. As Harry puts it, “Trump is using tariffs as a bullying tactic to make South Africa toe the line.”
BRICS, the Dollar, and diplomatic tensions
Complicating matters further is Trump’s recent warning to BRICS-aligned countries. He’s threatened an additional 10% tariff if these nations support cross-border systems that bypass the US Dollar - a direct shot at the BRICS initiative to reduce Dollar dependence.
This geopolitical tension has impacted the Rand, which weakened from R17.49 to R17.79 against the US Dollar following his latest threats. However, the local currency has weathered the blow better than expected. Scherzer pointed out that this may be due less to internal strength and more to weakness in the Dollar, caused by global uncertainty over Trump’s policies.
SA’s weak bargaining position
In trade negotiations, SA lacks leverage. The US is our second-largest trading partner, and the economic imbalance makes it difficult for us to apply any meaningful counterpressure. “We’re over-reliant on the US,” said Scherzer. “They don’t need us nearly as much as we need them, and they know that.”
This puts SA at a crossroads:
- Comply with US demands to preserve our current economic position
- Or risk short-term losses by aligning more strongly with BRICS and seeking alternative trade partners
So why hasn’t the Rand collapsed?
Despite all the political drama, the Rand has remained relatively stable, trading under the R18/USD mark. According to Scherzer, that’s because markets have become desensitised to Trump’s repeated threats.
“Investors are playing a wait-and-see game. They’ve seen this behaviour before, and they’re not reacting until action is taken,” he said. “The market now reacts more to what Trump actually does rather than what he says.”
Looking ahead
As we approach the 1 August deadline, SA faces significant uncertainty. A full-scale tariff implementation could place immense pressure on our export economy and currency, but the market is holding steady for now.
