Donald Trump-Imposed Tariffs Could Impact SA Prices, FirstRand CEO Warns

• President Donald Trump announced bold intentions to impose higher tariffs on foreign goods entering the US
• In a virtual World Economic Forum (WEF) address, Trump promised to use the tariffs to boost the US economy
• FirstRand chief executive Mary Vilakazi assessed the potential effect of Trump's policies and impositions

DAVOS — US President Donald Trump has begun his newest tenure at the helm of the most powerful economy in the world with a series of strong declarations.

Chief among them is effecting wholesale changes to the pattern of how global businesses interact with the United States.

US foreign tariffs hike likely disastrous

Leveraging off his "big belief" in tariffs on foreign goods, Trump has promised to use them to boost the US economy and revitalise its industrial heartlands.

Hence, his challenge to world government, business, and civil leaders from over 130 countries at the World Economic Forum (WEF) in Davos, Switzerland, from 20 to 24 January 2025, to "come make your product in America!"

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The invitation was accompanied by his promise of low taxes.

"But if you don’t make your product in America – which is your prerogative – then, very simply, you will have to pay a tariff," he declared in his virtual address to the forum on the third day.

Following Trump's speech, talk of the likely effects the move, when imposed as soon as February, will have on Africa, in particular South Africa, took off.

According to FirstRand chief executive Mary Vilakazi, it will be resounding. Vilakazi said the tariffs had the potential to increase prices in SA.

"This will lead to a stronger dollar and a weaker rand, which will hurt African nations with higher debt loads," said Vilakazi.

"Worryingly will be the inflationary impact of the tariffs, in addition to other [trade] policies which the US spearheads.

Despite the worries, she said an eye has to be kept on how Trump executed his tariff promise, adding:

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"We shouldn't get excited ... South Africa could dodge his economic bullet if the National Unity Government (GNU) prioritises gross domestic product (GDP) growth while ensuring structural reforms take priority.

"The GNU has its vulnerabilities, but I think beyond what plays out in public, there is a tangible commitment to ensure things work [and the formal labour market] is rallying behind and supporting its agenda."

While Trump said he would put pressure on Saudi Arabia and the Organisation of the Petroleum Exporting Countries (OPEC) to reduce oil prices, and asserted that the word tariff was "the most beautiful" in the dictionary, economists and US importers warned of its ugly consequences.

With the new administration threatening to impose sweeping new tariffs, exporters around the world are bracing for an era of uncertainty.

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Source: Briefly News