Africa-Press – South-Africa. South Africa needs to fast-track structural reforms to cushion the economy from the effects of US President Donald Trump’s punishing tariffs, the country’s central bank said.
“Accelerating structural reforms could boost productivity, mitigating the loss of export competitiveness,” the South African Reserve Bank said in its semi-annual Monetary Policy Review published on Thursday in the capital, Pretoria.
“Efforts should also focus on diversifying export markets and strengthening existing trade partnerships, including full implementation of the African Continental Free Trade Area agreement.”
Since 7 August, Trump applied varying duties on trading partners, with South Africa’s levy the highest in sub-Saharan Africa at 30%. The tariffs are a threat to South Africa’s automotive and agriculture sectors, which rely on access to US markets under an existing trade agreement.
Although the central bank expects limited economy-wide impact from the tariffs, the fallout is likely to be significant for specific sectors, with its modeling showing as many as 40,000 jobs at risk.
It cautioned that high tariffs could weaken South Africa’s role in some global supply chains, such as in the specialized automotive chain.
The US is South Africa’s third-largest export market for vehicles and automotive parts, with shipments of 35 billion rand ($2 billion) in 2024.
“The 25% tariff levied on South Africa’s auto and parts exports is higher than that for most competitors and will sharply reduce South Africa’s competitiveness in the US market, threatening output and jobs in a sector that anchors the broader manufacturing base,” the central bank said.
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