Economist warns of impact of US-China ‘trade war’ on SA

Stellenbosch Business School Economist, Professor Andre Roux, has cautioned about the risk of a trade war between the United States and China as Donald Trump is sworn in as the 47th President of the United States today.

Trump has expressed plans to impose tariffs of 60 to 100% on imports, particularly from China, a move that has raised global economic concerns, including in Africa.

Roux explains the potential implications for South Africa. “He says he wants to impose tariffs on all imports from everywhere in the world, but particularly on imports from China. Now that could set off a kind of tit-for-tat situation. China might take steps in return, and we don’t want that either. That’s again the idea of a trade war. Now Africa and SA might get caught in the crossfire.”

Roux also highlighted possible risks to agreements such as the African Growth and Opportunity Act (AGOA), adding, “So, South Africa seems to be a supporter of China, and indeed of Russia, and an anti-Israel protagonist. Then if that doesn’t go well for his view of Africa and SA – it will put things such as AGOA at threat.”