Rob Davies, Trade and Industry Minister of South Africa said that the region needs to fortify its ties within the continent. He also said that as the country is getting hit by a developing trade war, prompted by the US, therefore it needs to establish a regional market.
US President Donald Trump started a trade war, where multiple countries across the globe were threatened and tariffs where placed against them. While countries like China and Canada have been ignorant to Trump’s work, South Africa has been caught in the disagreement.
Davies happily discussed the US’s trade as a country, without mentioning Trump’s name.
In a panel discussion at the 10th annual BRICS summit in Johannesburg, he 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.”
“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,” he added.
Trump administration In June imposed a 25 per cent duty on steel and 10 per cent levy on aluminium from South Africa, Canada, the European Union and Mexico.
In March, South Africa applied for an exemption from the tariffs. However, the US rejected the pleas of Davies and other officials of South Africa.
After negotiations with the US, Davies said, “South Africa notes with concern the different treatment of trading partners, which will have an effect on the competitiveness of South African steel and aluminium products in the US. The dti continues to engage the industry on the matter and will pursue further discussions with the US on this issue.”
The US considers the tariffs as a need to protect its industry and national security. However, the government of most-industrialised economy of Africa is concerned that the new wave of tariffs that are being considered by the US can be extended to the auto industry, which is a massive part of the economy of South Africa.
The International Monetary Fund (IMF) on July 16 warned that as the trade tensions are escalating, they are threatening to disrupt a global upswing, which is already losing momentum. The growth in Europe and Japan have been weaker-than-expected, because the financial markets seem satisfied to the increasing risks.
“South Africa is not a major protagonist but we are being hit by collateral damage,” Davies said.