Latest News Archive

Please select Category, Year, and then Month to display items
Previous Archive
07 April 2025 Photo Supplied
Dr Calvin Mudzingiri
Dr Calvin Mudzingiri, Assistant Dean: Faculty of Economic and Management Sciences, University of the Free State, Qwaqwa Campus.

Opinion article by Dr Calvin Mudzingiri, Assistant Dean: Economic and Management Sciences, University of the Free State, Qwaqwa Campus 


The sudden hike of import tariffs by US President Donald Trump and his administration to countries across the world is set to reduce the volume of goods traded and affect citizen welfare across the globe. The Trump administration implemented a global 10% import tariff and a varying targeted reciprocal tariff to a host of countries, including South Africa. The reciprocal import tariff to be levied on South African export goods to the US is set at 30%. Historical data show that yearly trade between SA and US amounts to $23 billion and the US is SA’s the second biggest trading partner after China. The high tariff will reduce the competitiveness of South African export goods to American markets, leading to reduced demand of SA exports in US markets, low income to firms, job losses, low income to households and ultimately lower South African economic growth.

 

SA and US trade

South Africa exports platinum, locally assembled cars, raw aluminium, ferroalloys and agriculture products, among other goods, to the US. The implication of the US administration’s 30% tariff hike could result in job losses in the mining, automobile, agriculture and many other industries. More income losses to SA agricultural exports can also be experienced if the African Growth Opportunity Act (AGOA) expires in September 2025, if the US congressmen decide not to renew the agreement. Given the low economic growth rate in South Africa in 2024, which is estimated at 0.6%, the tariff hike by the US will exacerbate sluggish economic growth and recovery from the COVID 19 pandemic. 

Statistics also show that SA imports energy products, machinery, vehicle, industrial and other consumer goods. The goods and services SA imports from the US play a critical role in developing and sustaining local industry. SA can decide to source the goods from other markets and if this happens with all economies where tariffs were imposed, the US will be worse off. There is a possibility that economies which received a tariff hike from the US will implement a reciprocal tariff hike to the US reducing the volume of global trade. The reduced trade volumes have dire implications for job creation, income generation by firms and households, making citizens worse off.


US current trade policy

It is important to note that President Trump administration’s trade policies are premised on a trade notion synonymous to ‘mercantilism’, which was practised in Europe between the 16th to 18th centuries. Under mercantilism, an economy aims to maintain a trade surplus, the government regulate the economy, discourage imports (in the case of the US using tariff hikes) and promote growth of home industries among other initiatives. Conventional economics wisdom has proved that policies pursued by the Trump administration of protectionism are a breeding ground for trade wars. There is great potential of fellow trading partners retaliating and if that happens, global citizens will be made worse off as they will be forced to pay high prices for goods due to additional costs driven by tariff hikes. In addition, US industry relies on raw materials from other countries. If the suppliers of raw material resources retaliate, the production cost model of US firms will rise, reducing export competitiveness of US exports.

Trump’s administration is calling for firms across the world to move and produce goods in the US to avoid tariff levies. The action works against the benefits of free trade and can affect firms’ comparative advantages. The production cost structure in the US can be higher than in other countries leading to firms realising low profits if they move to the US. It is essential to note that free trade with absolutely no trade barriers will enhance the welfare of citizens at large, since goods and services will be purchased at low prices. The US government’s act of over-regulating trade can limit economic growth not only of other countries but even that of the US economy.

 

Options for the SA government

In the face of trade adversity, the SA government must not fold its hands and do nothing. It is enlightening to note that the authorities have already initiated diplomatic and trade negotiations. Negotiations can possibly focus on tariff reduction, maintaining the AGOA, and delving deep in the logic used to arrive at the 30% tariff hike. The diplomatic initiatives must encompass improving perceptions and clarity of SA policies such as the Expropriation Act which is one of the reasons cited by the US administration in ratcheting the tariff trade war.

South Africa must re-orient its trading patterns and partnerships. The aggregate world gross domestic product (GDP) is greater than the US total production for goods and services. There is need for SA to improve trade relations with other economies to broaden its trade base. The current frosty trade relationship between SA and the US presents a window to strengthen trade with the EU, Asia, BRICS plus, Africa, and any other economy willing to get into trade partnerships. SA must explore other markets where the export goods still enjoy competitiveness.

To ensure economic resilience to trade wars in the long run, SA needs to seriously invest in research and development that promote value addition of local production, enhancing local production and technology advancement that can stimulate economies of scale, which can boost competitiveness of export goods. Competitiveness can be further enhanced by improving energy production efficiency, which is a crucial input of goods and services production. Developing a powerful and skilled human capital base can lead to labour productivity efficiency, further enhancing competitiveness. SA has a dilapidated infrastructure ranging from roads, rail, buildings and industry among others. Improving the infrastructure will go a long way in improving local production, leading to creation of jobs and improved incomes for households.

Boosting local economic activity can stimulate local consumption of goods as household income improves. If the incomes of SA citizens improve, there is a potential to increase local consumption. Goods meant for export markets can end up being consumed in the domestic markets, providing a homemade solution to dwindling export goods markets. The SA government must consider developing and supporting new industries that can compete in the local and international markets. In this way, the trade challenges posed by unfriendly US administration trade policies can present opportunities to the SA economy in the long run.

News Archive

CR Swart Memorial Lecture: Mr Cecil le Fleur
2006-08-08

Khoe and San call for government to speed up policy dialogue with indigenous communities  

 Mr Cecil le Fleur, leader of the National Khoe-San Consultative Conference and member of the executive management of the National Khoe-San Council, has called for a national policy on indigenous peoples to protect the human rights and special needs of indigenous people in South Africa.

 Mr Le Fleur delivered the 38th CR Swart Memorial Lecture on the Khoe and San at the University of the Free State (UFS).  He commended the UFS for its serious approach to the Khoe and San and for initiating initiatives such as a research project on the Griqua in which various aspects linked to language, -culture, -history, - leadership, their role in the South African community (past and present) and the conservation of their historical cultural heritages will be covered.   

 “The policy dialogue with indigenous communities initiated by government in 1999 and supported by the International Labour Organisation (ILO), has been exceedingly slow, owing to political and bureaucratic problems,” said Mr Le Fleur.

 According to Mr Le Fleur the slow pace is also impacting negatively on the United Nations’ efforts to expand the international standards and mechanisms for human rights so as to include the special needs of indigenous peoples.

 “The successful adoption of a South African policy would probably have a major impact on the human rights culture of Africa and, more specifically, on the UN system,” he said.

 “South Africa has a powerful moral authority internationally and is willing to use this authority in multilateral forums. At this stage, however, South Africa’s Department of Foreign Affairs (DFA) may not take an official position on UN instruments and declarations pertaining to indigenous issues, until the Cabinet has resolved its own domestic policy position,” he said. 

 According to Mr le Fleur it therefore came as a great surprise when the DFA brought out a positive vote in the UN for the adoption of the "Draft Declaration on the Rights of indigenous Peoples" in June this year, even before the completion of the policy process. 

 Policy consolidation in South Africa is the primary key to creating a new policy climate in Africa in order to protect the rights of indigenous peoples.  “The existing constitution of the Republic of South Africa is one of the most liberal on the continent, and embraces the concept of redress of past discrimination.  It already includes a clause (Section 6) making provision for the protection of language rights for Khoe and San peoples - the fist peoples of southern Africa,” he said. 

 “If South Africa can effectively integrate this ‘third generation’ of collective rights within an existing democratic constitution, this will send a clear message to Africa and the world that indigenous rights are a necessary component of human and civil rights in modern democracies,” he said.

 Mr Le Fleur proposed an institutional framework based on set principles that would satisfy the needs and aspirations of the Griqua and other first indigenous peoples in South Africa.  “The proposed framework was based on the notion of vulnerability as a result of colonialism and apartheid, which stripped us of our indigenous identity, cultural identity and pride as people.  This injustice can hardly be addressed within the existing mechanisms provided by the current text of the Constitution,” he said.

 Mr Le Fleur also proposed that the principles of unique first-nation status, as recognised in international law, should be applied in the construction of the framework of the constitutional accommodation for the Khoe and San. 

 Mr Le Fleur further proposed that the Khoe and San’s indigenous status in constitutional terms must be separate from the constitutional acknowledgement of their status as a cultural community, as envisaged in sections 185 and 186 of the Constitution of 1996.

 According to Mr Le Fleur, the suggested mechanism should make provision for structures such as:

  •  A statutory representative council for First Indigenous Peoples of South Africa at a national level;
  • a separate Joint Standing Committee on Indigenous and Traditional Affairs, in both the National Assembly and the National Council of Provinces on which the Khoe and San can be represented;
  • a representative structure for the Khoe and San in the legislature of each relevant province; and
  • ex officio membership in the relevant structures of local government.

Media release
Issued by: Lacea Loader
Media Representative
Tel:   (051) 401-2584
Cell:  083 645 2454
E-mail:  loaderl.stg@mail.uovs.ac.za 
24 August 2006


- Full lecture
- Photo gallery
 

 

 

 

We use cookies to make interactions with our websites and services easy and meaningful. To better understand how they are used, read more about the UFS cookie policy. By continuing to use this site you are giving us your consent to do this.

Accept