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Trump''s tariffs put 100,000 jobs at risk in South Africa, central bank chief says

In a stark warning about the potential economic fallout from international trade policies, South Africa's central bank governor, Lesetja Kganyago, has highlighted the severe risks posed by proposed tariffs from former U.S. President Donald Trump. These tariffs, if implemented, could jeopardize approximately 100,000 jobs in South Africa, a country already grappling with significant economic challenges. Kganyago's concerns stem from Trump's campaign promises to impose hefty tariffs on imported goods, a policy that could have far-reaching implications for global trade dynamics and particularly for economies like South Africa that rely heavily on exports to the United States.

During his tenure as president, Trump was known for his protectionist stance, often prioritizing domestic industries over international trade agreements. His administration imposed tariffs on a range of goods, including steel and aluminum, citing national security concerns and the need to protect American jobs. Now, as Trump campaigns for another term in office, he has reiterated his intention to introduce even broader and more aggressive tariffs. This includes a proposed 10% to 20% tariff on all imported goods, with even higher rates—potentially up to 60%—on products from China. Such measures, while aimed at bolstering the U.S. economy, could have a devastating ripple effect on countries that depend on access to the American market.

South Africa, as one of Africa's largest economies, stands to be significantly affected by these policies. The country exports a variety of goods to the United States, including automobiles, agricultural products, and minerals. The automotive sector, in particular, is a critical component of South Africa's economy, employing tens of thousands of workers and contributing substantially to the nation's gross domestic product (GDP). Many of these vehicles are exported under the African Growth and Opportunity Act (AGOA), a U.S. trade program that provides duty-free access to the American market for eligible African countries. However, Trump's proposed tariffs could undermine the benefits of AGOA, potentially leading to reduced exports and significant job losses in South Africa.

Governor Kganyago emphasized that the imposition of such tariffs would not only disrupt South Africa's trade relationship with the United States but also exacerbate the country's already high unemployment rate. South Africa currently faces an unemployment rate that hovers around 30%, one of the highest in the world, and the loss of 100,000 jobs would represent a severe blow to an economy struggling to recover from the impacts of the COVID-19 pandemic, persistent power shortages, and structural inequalities. The central bank chief underscored that these job losses would likely be concentrated in industries directly tied to exports, such as manufacturing and agriculture, which are vital for sustaining livelihoods in both urban and rural communities.

Beyond the immediate economic impact, Kganyago also pointed to the broader implications of a shift toward protectionism in global trade. He argued that tariffs and trade barriers could trigger retaliatory measures from other countries, leading to a downward spiral of reduced trade and economic growth worldwide. For South Africa, which is already navigating a delicate balance between domestic economic reforms and international trade partnerships, such a scenario could further complicate efforts to attract foreign investment and stimulate growth. The central bank governor called for a renewed focus on multilateral trade agreements and cooperation to mitigate the risks posed by unilateral actions like the proposed U.S. tariffs.

The potential impact of Trump's trade policies on South Africa also raises questions about the future of AGOA, which has been a cornerstone of U.S.-Africa trade relations since its inception in 2000. While the program has been instrumental in fostering economic ties and supporting development in African nations, its benefits could be eroded if blanket tariffs are applied to imports from the continent. South African policymakers and business leaders are likely to intensify lobbying efforts in Washington to ensure that the country retains preferential access to the U.S. market, even as the political landscape in the United States remains uncertain.

Moreover, Kganyago's warning comes at a time when South Africa is attempting to diversify its export markets to reduce reliance on any single country or region. Efforts to strengthen trade ties with other African nations through the African Continental Free Trade Area (AfCFTA) and to deepen partnerships with emerging economies like China and India are underway. However, the United States remains a critical market for South African goods, and any disruption in this relationship could undermine these diversification strategies in the short term. The central bank chief stressed the importance of preparing for potential trade shocks by building economic resilience and investing in domestic industries that can withstand global uncertainties.

The broader context of Trump's tariff proposals also reflects a growing trend of economic nationalism in various parts of the world. As countries grapple with the challenges of globalization, including income inequality and job displacement, leaders like Trump have capitalized on public discontent by advocating for policies that prioritize national interests over international cooperation. While such policies may resonate with domestic audiences, they often come at the expense of smaller or developing economies that lack the leverage to negotiate favorable trade terms. For South Africa, the stakes are particularly high, as the country seeks to balance its domestic priorities with the need to maintain strong international trade relationships.

In addition to the economic risks, there are also geopolitical considerations at play. South Africa's relationship with the United States has historically been complex, shaped by a mix of cooperation and tension over issues such as human rights, governance, and foreign policy. A deterioration in trade relations due to tariffs could strain diplomatic ties, potentially affecting collaboration on other fronts, such as climate change initiatives or regional security efforts in Africa. Kganyago's comments thus serve as a reminder of the interconnected nature of economic and political dynamics in an increasingly volatile global landscape.

As South Africa braces for the possibility of these tariffs, there is a pressing need for both government and private sector leaders to develop contingency plans. This could involve identifying alternative markets for key exports, investing in value-added industries to boost competitiveness, and strengthening social safety nets to support workers who may be affected by job losses. At the same time, dialogue with U.S. counterparts will be crucial to mitigate the impact of any trade barriers and to advocate for the mutual benefits of continued economic partnership.

In conclusion, the potential imposition of tariffs by a future Trump administration poses a significant threat to South Africa's economy, with the risk of losing 100,000 jobs serving as a stark illustration of the stakes involved. Central bank governor Lesetja Kganyago's warning underscores the urgency of addressing these risks through proactive policy measures and international cooperation. While South Africa cannot control the outcome of U.S. political decisions, it can take steps to build resilience and adaptability in the face of uncertainty. The coming months and years will be critical in determining how effectively the country navigates these challenges and safeguards its economic future in an increasingly protectionist world. The broader lesson for the global community is clear: trade policies in one nation can have profound and far-reaching consequences for others, highlighting the need for dialogue, compromise, and a shared commitment to economic stability.

Read the Full Reuters Article at:
[ https://www.reuters.com/business/autos-transportation/trumps-tariffs-put-100000-jobs-risk-south-africa-central-bank-chief-says-2025-07-16/ ]