Rand fairly stable after Trump tariff shock in early morning trade Tuesday

IOL News

10 hours ago

US President Donald Trump imposes 30% tariffs on South Africa.
Image: White House
The rand weakened marginally overnight after US President Donald Trump slapped South Africa with 30% tariffs on goods exported to America, based on an alleged trade imbalance, although there may be more volatility to come.
Having reached R17.73 at 5pm South African time on Monday, it dropped 0.7% as Trump made his shocking announcement in the US. However, by 6am Tuesday morning, it had recovered to R17.79, suggesting that markets had mostly priced in a resumption of tariffs ahead of Trump's initial July 9 deadline.
South Africa's rand weakened marginally overnight on Tuesday after Trump imposed 30% tariffs.
Image: Wise.com
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Trump, who has vacillated in terms of taxes and trade deals, initially announced a 30% trade duty on South Africa's exports on his so-called 'Liberation Day' on April 2 before walking back his move in response to a massive hit on US markets.
Having then decided that import taxes would stay at 10% for 90 days, he has been negotiating trade deals with several countries, although only China, the UK, and Vietnam had inked agreements as of last week. South Africa has failed to sign a deal so far.
Trump has taken particular umbrage with countries in the BRICS bloc, having said on his social media platform, Truth Social, that countries 'aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff. There will be no exceptions to this policy.'
Old Mutual chief economist, Johann Els, said that Trump's decision to impose 30% tariffs on all South African exports to the US, excluding precious metals is 'contrary to expectations after President [Cyril] Ramaphosa's White House visit and comes as a disappointment.'.
In a voice note shared at 10pm, Els added that 'even though it will have a negative impact on South Africa's economy in terms of GDP growth, I think to a large extent the impact has been priced in since the April 2 announcement of 'Liberation Day' tariffs.'
Els added that less than 8% of South Africa's exports goes to the US. 'I suspect that some of our exporters have already found some alternative export markets. Nevertheless, it is a negative and it will impact negatively on sentiment, even though some of it might have been priced in.'
Trump, who has vacillated in terms of taxes and trade deals, initially announced a 30% trade duty on South Africa's exports on his so-called 'Liberation Day' on April 2 before walking back his move in response to a massive hit on US markets.
Having then decided that import taxes would stay at 10% for 90 days, he has been negotiating trade deals with several countries, although only China, the UK, and Vietnam had inked agreements as of last week. South Africa has failed to sign a deal so far.
Trump has taken particular umbrage with countries in the BRICS bloc, having said on his social media platform, Truth Social, that countries 'aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff. There will be no exceptions to this policy.'
Old Mutual chief economist, Johann Els, said that Trump's decision to impose 30% tariffs on all South African exports to the US, excluding precious metals is 'is contrary to expectations after President [Cyril] Ramaphosa's White House visit and comes as a disappointment'.
In a voice note shared at 10pm, Els added that 'even though it will have a negative impact on South Africa's economy in terms of GDP growth, I think to a large extent the impact has been priced in since the April 2 announcement of 'Liberation Day' tariffs.'
Els added that less than 8% of South Africa's exports goes to the US. 'I suspect that some of our exporters have already found some alternative export markets. Nevertheless, it is a negative and it will impact negatively on sentiment, even though some of it might have been priced in.'