South Africa needs to strengthen its ties within the continent and establish a regional market as it gets hit by a developing trade war instigated by the US, Trade and Industry Minister Rob Davies said.
There is “great skepticism against multilateralism” developing in the US, “which is not good for any of us because it means we don’t have a set of rules we can rely on and leaves us exposed to the full power relations in the world economy,” Davies said on Wednesday in a panel discussion at the 10th annual Brics summit in Johannesburg.
“For a small economy like ours, it’s not a good place to be in. It means we need to find a solution to this in the African continent and in strengthening regional integration.”
In June, the Trump administration imposed a 25% duty on steel and 10% levy on aluminum from South Africa, the European Union, Canada and Mexico, after refusing their calls for permanent exemptions.
The US says the tariffs are needed to protect its industry and national security. The government of Africa’s most-industrialised economy is concerned that the US is considering a new wave of tariffs that could be extended to the auto industry, which is one of the cornerstones of South African manufacturing.
Escalating trade tensions are threatening to derail a global upswing that’s already losing momentum amid weaker-than-expected growth in Europe and Japan as financial markets seem complacent to the mounting risks, the International Monetary Fund warned on July 16.
“South Africa is not a major protagonist but we are being hit by collateral damage,” he said.
* SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.