While there is a great deal of fear at the moment, South Africa is not without remedies, North-West University Business School’s Professor Raymond Parsons has said in response to the decision by US President Donald Trump to impose a 30% tariff on all South African goods exported to the US.

He said the global reality was that the aggressive US tariff policy was creating a fragmented world trading system that further elevated economic uncertainty, disrupted supply chains and hampered economic activity.

“As a small open economy, it remains essential that bilateral negotiations must continue to stabilise and consolidate future US-South Africa investment and trade relations. And collaboration between government and the private sector must continue to accelerate the steady identification of alternative markets, for which South Africa must remain globally competitive,” he said on July 8.

Parsons said the costs of doing business in South Africa remained too high.

“It therefore also becomes even more essential to speedily implement growth-friendly policies that build economic buffers and reduce costs in ways that also enable South Africa to successfully deal with any global setbacks,” he added.

Parsons said the incipient economic recovery in South Africa was presently struggling to gain strong momentum.

“The Government of National Unity’s policy agenda for a 3% GDP growth target in the medium term therefore now urgently needs an impulse, a jolt, an acceleration to ensure that the tailwinds in the economy prevail over the headwinds in 2025 and beyond,” he said.

Parsons said the 30% US tariff decision was not good news for the South African economy and its potential negative economic impact should not be underestimated.

“While not unexpected, it creates a challenging economic headwind for South Africa. For now, the most vulnerable sectors for South Africa, such as agriculture and cars, remain badly affected unless last-minute negotiations can still ameliorate the situation by August 1,” he said.

Parsons believes it is clear that the latest US tariff decision offset any remaining advantages of duty-free access enjoyed until now by South Africa under the African Growth and Opportunities Act, which in any event seems unlikely to be renewed by the US Congress later this year.

“What further remains uncertain is the status of the threat by . . . Trump to impose an additional 10% tariff on BRICS members,” Parsons said.

This could bring the total tariff to 40%.