The US Supreme Court’s decision last week to declare President Donald Trump’s reciprocal tariffs illegal is a “welcome respite” for several countries, South Africa included, which have had to contend with an aggressive US tariff policy of late, North-West University Business School economist Professor Raymond Parsons says.

The court upheld the principle that the rule of law applies to any changes in US import tariffs and that legal remedies are possible for businesses wanting to redress the situation, he points out.

However, the court did not address the question of whether the illegal import duties paid so far would need to be repaid, and this will have to be litigated separately, Parsons explains.

Although the court has now, in effect, also made the 30% import tariff recently imposed on South Africa by Trump illegal, Parsons cautions that the country must be realistic.

“The court decision does not in reality simply mean going back to square one in the erratic configuration of US tariff policy. Under alternative legislation, President Trump has now imposed a new broad tariff of 15% – within a day of a previously announced tariff of 10% – for a period of 150 days, pending Congressional approval.

“Additionally, certain key sector-specific tariffs, such as on steel and automotives, are in any event excluded from the Supreme Court’s decision,” he outlines.

Therefore, Parsons posits that the immediate economic impact of the court’s verdict is “inevitably a recipe for more confusion and uncertainty”, including for South African business, about future US trade policy.

“The net effect of the latest changes in US tariff levels needs to be urgently clarified by countries like South Africa, who do important business with the US. President Trump is still determined to rebuild US tariff walls, and the threat of new tariffs remains real.

“The future of the African Growth and Opportunity Act and South Africa’s continued participation in it are also on a completely separate policy track. Tough negotiations with the US still lie ahead for South Africa,” he warns.