For South Africa, which relies heavily on the multilateral trading system, the implications of such a policy shift could result in significant risks for the country's exports.
Trader Michael Capolino wears a Trump hat as he works on the floor of the New York Stock Exchange. Wall Street stocks surged in opening trading on Wall Street Wednesday after US voters sent Donald Trump back to the White House and delivered him a Republican Senate. Photo: AFP South Africa remained on knife-edge yesterday as the markets tanked in the aftermath of the US election results, which saw Donald Trump securing his return to the White House as the 47th President of the United States.
Parsons cautioned that the political rhetoric surrounding Trump's administration could translate into real policy implications, particularly through a proposed general tariff increase of 20% on all imports and potential 60% tariffs on goods from China. “Policy uncertainty may eventually prevail over political continuity in the current global economic outlook. Political rhetoric will eventually be converted into policy outcomes by the Trump administration next year, such as heightened protectionism,” Parsons said.
Under the previous Trump presidency between 2017 and 2021, higher tariffs in the US and retaliation saw trade wars as countries the US trades with instituted higher tariffs on goods from the US added to inflationary pressures, with deglobalisation and worries over global growth. Investec chief economist Annabel Bishop also said previous trade wars under the last Trump presidency negatively impacted investor sentiment, which resulted in higher risk aversion.
While US growth is expected to eventually accelerate under Trumps’s Presidency, concerns are for a year or two the economy could falter as it takes a lengthy period for industry to be built up as onshoring gets under way.
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