South Africa’s rand fell on Monday as markets reacted to U.S. President Donald Trump’s threat to impose additional tariffs on BRICS-aligned countries, while also awaiting updates on country-specific levies ahead of Washington’s looming July 9 deadline.
Trump said on Sunday in a post on Truth Social that countries aligning themselves with what he called the “anti-American policies” of BRICS will be charged an extra 10 per cent tariff, adding that there will be no exceptions to this policy.
At 1144 GMT, the rand traded at 17.7450 against the dollar, down about one per cent from Friday’s close and paring some of its recent gains.
South Africa, which is part of the BRICS group, said on Monday that it is not anti-American and that the group of developing countries should be seen as a push for “reformed multilateralism, nothing more”.
“The additional 10 per cent BRICS tariffs would add further drag to South Africa’s export competitiveness,” said Annabel Bishop, Investec’s chief economist.
As a result, she said, the rand is expected to remain volatile for the rest of the month and early August.
Trump said the U.S. is close to finishing several trade pacts in the coming days and will notify other countries of higher tariff rates by July 9, set to take effect on Aug. 1.
Trump imposed a 31% tax on U.S. imports from South Africa in April as part of his global tariff policy, and Pretoria has been trying to negotiate a trade deal since May, when the U.S. leader hosted President Cyril Ramaphosa for talks in the White House.
South Africa aims for a deal that would exempt some of its key exports from the tariffs, including autos, auto parts, steel, and aluminium, in exchange for buying liquefied natural gas from the United States over 10 years.
“South Africa still has a significant bargaining position if one focuses on the mining industry and some of the rare earth minerals that the country can provide over and above its position as the world’s largest platinum producer,” ETM Analytics said in a research note.
The Johannesburg Stock Exchange’s Top-40 index was last down 0.1 per cent.
South Africa’s benchmark 2035 government bond was weaker, with the yield up 9.5 basis points at 9.835 per cent. (Reuters/NAN)
South African Rand Slumps After Trump’s Tariff Threat On BRICS-aligned Countries
