SA govt must carefully consider options on US tariffs, say economists

JOHANNESBURG - While South Africa's trade relationship with the United States hangs in the balance, some economists suggest government needs to carefully consider its options after being slapped with a 30% tariff.

South Africa is among several countries affected by President Donald Trump’s tariffs on exports to the United States.

The tariff will take effect next Wednesday, meaning South Africa will have to spend more to export goods to the US.

The Presidency has announced it's working on a new proposal for the United States to ensure continued trade without imposing high fees on exports to the country.

Political economist, Dale McKinley, said that although South Africa could impose similar tariffs on minerals for the United States, the country must first carefully consider the safest course of action.

"The dominant response is going to be to try and engage the USA, secondly to try and increase other markets, and thirdly to try and protect your own domestic economy."

Analyst Khaya Sithole has echoed the sentiments.

"If the South African government wants to impose retaliating tariffs, it would be important to understand what the spectrum of effects will be on South African exporters."

Meanwhile, government said it would try to negotiate its way out of the 30% tariff imposed by the Trump administration.