South African rand steady on hopes for further trade talks with the US
Trump informed Pretoria and more than a dozen other trading partners of sharply higher trade levies in a wave of letters sent out on Monday. South Africa is facing a 30% trade tariff on its exports to the U.S., but the extended deadline has opened a window for further negotiations.
At 1351 GMT, the rand traded at 17.8150 against the dollar , up roughly 0.3% on Monday's close, seemingly clawing back some of its losses after falling well over 1%.
The risk-sensitive currency was already reeling after Trump threatened an additional 10% tariff on any country aligning with what he called the 'Anti-American policies' of the BRICS group of big emerging markets, which South Africa is a member of.
The U.S. is South Africa's second-largest bilateral trading partner after China. In addition to minerals, car parts and other manufactured goods, South Africa exports agricultural products to the U.S. and stands to lose about 35,000 jobs in the citrus industry if the tariffs take effect.
South African rand falls, US bill and tariff updates in focus
South African President Cyril Ramaphosa said the 30% tariff rate is not an accurate representation of available trade data, though negotiations between the two nations will continue.
Ramaphosa also urged South African companies to diversify their customer base beyond the U.S.
'While strategically sound, this is not an easy shift to make in the short term,' said George Herman, Chief Investment Officer at Citadel.
'It's difficult to see what bargaining power South Africa holds, especially given U.S. President Donald Trump's negatively biased view…'
Trump confronted Ramaphosa earlier this year with false claims of white genocide and land seizures and has criticised South Africa's genocide court case against Israel.
The Johannesburg Stock Exchange's Top-40 index was last up 0.2%.
South Africa's benchmark 2035 government bond was weaker, as the yield rose 5.5 basis points to 9.88%.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
an hour ago
- Business Recorder
Trump announces 50pc tariff on copper imports
WASHINGTON/TOKYO: US President Donald Trump broadened his global trade war on Tuesday as he announced a 50% tariff on imported copper and said long-threatened levies on semiconductors and pharmaceuticals were coming soon. One day after he pressured 14 trading partners, including powerhouse US suppliers like South Korea and Japan, with sharply higher tariffs, Trump reiterated his threat of 10% tariffs on products from Brazil, India and other members of the BRICS group of countries. He also said trade talks have been going well with the European Union and China, though added he is only days away from sending a tariff letter to the EU . Trump's remarks, made during a White House cabinet meeting, could inject further instability into a global economy that has been rattled by the tariffs he has imposed or threatened on imports to the world's largest consumer market. US copper futures jumped more than 10% after Trump's announcement of new duties on a metal that is critical to electric vehicles, military hardware, the power grid and many consumer goods. They would join duties already in place for steel, aluminum and automobile imports. US pharmaceutical stocks also slid from the day's highs following Trump's threat of 200% tariffs on drug imports, which he said could be delayed by about a year. Other countries, meanwhile, said they would try to soften the impact of Trump's threatened duties after he pushed back a Wednesday deadline to August 1. Trump's administration promised '90 deals in 90 days' after he unveiled an array of country-specific duties in early April. So far only two agreements have been reached, with the United Kingdom and Vietnam. Trump has said a deal with India is close. Trump said countries have been clamoring to negotiate. 'It's about time the United States of America started collecting money from countries that were ripping us off ... and laughing behind our back at how stupid we were,' he said. HIGHEST LEVELS SINCE 1934 Following Trump's announcement of higher tariffs for the 14 countries, US research group Yale Budget Lab estimated consumers face an effective US tariff rate of 17.6%, up from 15.8% previously and the highest since 1934. Goldman Sachs said Monday's actions would add 1.4 percentage points to the US effective tariff rate. Trump's administration has been touting those tariffs as a significant revenue source. Treasury Secretary Scott Bessent said Washington has taken in about $100 billion so far and could reach $300 billion by the end of the year. Global stocks showed muted reaction on Tuesday, as investors took in their stride the latest twist in the tariff saga. Trump said he will 'probably' tell the European Union within two days what rate it can expect for it exports to the US, adding that the 27-member bloc had been treating his administration 'very nicely' in trade talks. The EU, the largest bilateral trade partner of the US, aims to strike a deal before August 1 with concessions for certain key export industries, such as aircraft, medical equipment and spirits, according to EU sources. Brussels is also considering an arrangement that would protect European automakers with large US production facilities. However, German Finance Minister Lars Klingbeil warned that the EU was prepared to retaliate if necessary.
Business Recorder
an hour ago
- Business Recorder
Bulgaria becomes 21st member to adopt euro after EU green light
BRUSSELS, (Belgium): EU ministers gave the final green light on Tuesday for Bulgaria to adopt the euro on January 1, 2026, making it the single currency area's 21st member. Bulgaria's switch from the lev to the euro comes nearly 19 years after the country of 6.4 million people joined the European Union. 'We did it!' Bulgarian Prime Minister Rossen Jeliazkov said. 'We thank all institutions, partners and everyone whose efforts made this landmark moment possible. The government remains committed to a smooth and effective transition to the euro in the interest of all citizens,' Jeliazkov said on X. In adopting the legal texts necessary for the move, EU finance ministers officially set the euro at 1.95583 Bulgarian lev. 'Joining the euro area is much more than just about replacing lev with euro. It is about building a brighter and more prosperous future for Bulgaria and its citizens at the heart of Europe,' EU economy chief Valdis Dombrovskis said after the approval. 'The euro will bring new opportunities, investments, jobs and growth,' he said. The European Commission last month said the EU's poorest country had fulfilled the strict conditions to adopt the euro, while the European Central Bank (ECB) also gave a positive opinion. Bulgaria's journey to joining the eurozone has had a stormy political backdrop with seven elections in three years — the last in October 2024. But recent polls show Bulgarian society remains divided on the euro, with experts attributing the scepticism largely to fears of rising prices and declining purchasing power. President Rumen Radev shocked many when he proposed holding a referendum on the matter but that was given short shrift by the Bulgarian parliament. Since June, protesters have gathered in Sofia to call for 'keeping the Bulgarian lev'. A symbolic protest camp with several tents has been set up near the presidency and the Bulgarian National Bank in the capital. Far-right opposition parties have used the issue to promote anti-EU narratives.
Business Recorder
an hour ago
- Business Recorder
European shares rise on energy, healthcare boost
FRANKFURT: European shares ended higher on Tuesday, boosted by healthcare and energy shares while investors assessed the latest phase of US President Donald Trump's tariff rollouts, which included a new deadline for trade deals. The pan-European STOXX 600 index ended 0.4% higher, hitting its highest level in three weeks. Other regional indexes also clocked gains, with Germany's DAX and France's CAC 40 up about 0.5% each. German small caps also hit an all-time high on Tuesday, powered by a 20% jump in steelmaker Salzgitter after Germany approved for military use the company's Secure 500 steel product. Heavyweight energy shares advanced 1.1% on higher crude oil prices, and healthcare gained 0.8% with Danish drugmaker Novo Nordisk, one of the biggest weights on the STOXX 600, up 2%. In the latest in the tariff saga, Trump on Monday told 14 nations they would face tariffs ranging from 25% for countries including Japan and South Korea, to 40% for Laos and Myanmar. However, with the start date pushed back to August 1, it effectively created a three-week window for countries to press for better terms, while prolonging damaging uncertainty about the terms of trade. 'Trump's decision to push the tariff deadline to August 1 may have temporarily soothed market nerves, but the underlying uncertainty remains,' said Lukman Otunuga, senior market analyst at FXTM. 'If no meaningful trade deals are reached in the coming weeks, investors could brace for another wave of volatility.' For Europe, EU sources familiar with the matter told Reuters on Monday the bloc will not receive a letter from the United States setting out higher tariffs, and is eyeing possible exemptions from the US baseline levy of 10%. Countries have been under pressure to seal deals with the US after Trump launched a global trade war in April, which rattled financial markets and prompted policymakers to scramble to protect their economies. For European equities, the STOXX 600 has rebounded sharply from its April lows and now sits about 3% away from its all-time highs seen in March.
