Last week, President Trump unveiled new trade tariffs targeting key trade partners. Locally, President Cyril Ramaphosa responded to President Trump’s 30% tariff on South African products.
International Market Developments
Last week, US President Donald Trump escalated trade tensions by announcing steep new tariffs on a range of countries, with rates set to take effect on August 1st. South Africa faces a 30% levy, while Japan, South Korea, Malaysia, and Kazakhstan will see 25% duties. Laos and Myanmar were hit hardest with 40% tariffs. These measures form part of a broader push for “reciprocal levies,” set against the backdrop of Trump’s hardline trade stance and protectionist rhetoric.
White House Press Secretary Karoline Leavitt confirmed that about a dozen nations received official notices on Monday, with more to follow. Brazil, a fellow BRICS member, received a harsher 50% tariff, justified not on trade imbalances but on political grounds—specifically, retaliation for what Trump calls a “witch hunt” against former president Jair Bolsonaro. Despite being a major supplier of coffee and iron ore to the US, Brazil’s treatment underscores the administration’s willingness to politicize trade. To pre-empt legal challenges, Trump has ordered a Section 301 investigation into Brazil, signalling that the tariffs may be sustained under formal trade enforcement procedures. This wave of unilateral actions could significantly reshape global trade flows and deepen geopolitical divides, particularly among emerging markets.
Looking ahead, US inflation numbers are due for release on Tuesday.
Local Market Developments
Last week, South Africa was among the countries to receive a formal tariff notice from US President Trump, with a 30% levy effective 1 August—unchanged from the earlier reciprocal rate announced on Liberation Day. While Trump initially suggested the decision might not be final, he later ruled out any extension. President Cyril Ramaphosa contested the tariff, arguing it was based on flawed data. Trump defended the move as “common sense,” grounded in trade deficits and historical imbalances. Though the broader economic impact on South Africa is expected to be limited, specific sectors like automotive exports and parts of agriculture face significant pressure. The rand weakened sharply after the announcement, while dollar-denominated government bonds declined, though both recovered later.
Looking ahead, SA retail sales numbers for May are due to be released on Wednesday.