MALAIKA MAHLATSI

A week ago, the US government announced it will be imposing staggering 30% unilateral tariffs on SA imports, as well as varying levels of tariffs on foreign imports to various US trading partners.

These tariffs will be implemented from 12.01am on August 8. The Trump administration has plunged the world into a tariff war that is devastating some of the most vulnerable economies in the Global South.

Across the border in Lesotho, the initial 50% tariff that the US government had imposed, which has since been reduced to 15%, came dangerously close to crippling a country that is already in dire straits. Lesotho's textiles sector, its leading export industry, is heavily dependent on the Africa Growth and Opportunities Act (Agoa) – a US trade initiative that offers qualifying African nations duty-free access to the US market.

Agoa made it possible for Lesotho to develop a textiles sector that is the biggest private employer with just over 40,000 jobs. The sector also accounts for about 90% of the country's manufacturing exports. Had Trump's initial 50% tariff (the highest imposed on any country) been maintained, Lesotho's ailing economy would have collapsed.

In SA, Trump's tariffs could result in the loss of more than 30,000 jobs, according to the department of trade, industry & competition. In a country with a numbing unemployment rate of 32.9%, as of the first quarter of 2025 – an increase from 31.9% in the fourth quarter of 2024 – the loss of so many jobs will undoubtedly cripple the already depressed economy and plunge millions more people into poverty.

The US is SA’s third biggest trading partner, with the European Union and China being the first and second largest. The US accounts for 7.5% of our country's global exports, amounting to hundreds of millions of rand.

Trump's logic is that the tariffs are aimed at protecting US economic interests and will somehow grow their economy. But, as argued by Niven Winchester, economics professor at Auckland University of Technology, the tariffs will reduce US annual GDP by 0.36% – equating to $108.2bn (R1.95-trillion) or $861 (R15, 400) per household per year. And, while the tariffs will compel foreign producers to lower their prices, these price decreases only partially offset the cost of the tariffs.

This will result in US consumers paying higher prices. Businesses in the US will also pay more for goods. Furthermore, the tariffs decrease US merchandise imports by $486.7bn (R8.75-trillion). But as they drive up the cost of US supply chains and shift more workers and resources into industries that compete with imports, away from other parts of the economy, they also decrease US merchandise exports by $451.1bn (R8.11-trillion).

There's no question that Trump's tariffs are illogical and rooted more in his obsession with flexing his muscles and bullying other nations than in economic logic. But he is able to force African countries into begging – something that many are doing. African countries are making equally senseless trade-offs – such as trading mineral wealth for lower tariffs and other similar deals – to access a US market that could be replaced by other markets in the Global South.

But one good thing that has come out of this tariffs bullying is that the South African government finally realises the value of intra-African trade, which still represents a relatively small portion of Africa's overall global trade. In 2022, a year after the implementation of the AfCFTA, intra-African trade reached $102bn (R1.94-trillion), but only accounted for 15% of Africa's total trade.

Last year, intra-African trade reached $208bn (R3.74-trillion), representing a 7.7% increase compared to the previous year. While this increase is notable, it could and should be higher. African countries must focus on strengthening continental trade. If they don’t, we will continue to be victims of Trump’s senseless economics and US bullying – a shame for a continent endowed with so much natural resources and wealth.