Dr Reneva Fourie

IN early April 2025, President Trump increased tariffs on key trading partners, including China, Canada, Germany, Japan, and several African countries. The baseline tariff on all imports was 10%, and some countries faced up to 50%.

South Africa has been notably affected, facing a 30% tariff on goods entering the US based on a 60% reciprocal tariff claim. However, this is inaccurate, as SA’s average tariff is closer to 7.5%.

Trump’s use of tariffs transforms them from mere economic tools into sources of market unpredictability. Trump’s policy interventions are intentionally disruptive, reflecting a complex interaction of economic uncertainty, class conflict, and systemic instability.

These actions challenge the ideological foundations of the liberal global order, shifting the focus away from rules and institutions to a reality dominated by power, hierarchy, and national self-interest.

This new perspective on the world fuses techno-accelerationism with anti-globalist, anti-democratic, and elitist ideologies. The resulting global turmoil paves the way for undermining democratic systems in favour of a techno-fascist governance model.

Trump’s tariff wars can be viewed as a desperate imperialist manoeuvre aimed at regaining control in a landscape where American capital faces growing competition from alternative economies.

Although the intent behind implementing these tariff hikes is to lower the US trade deficit and boost domestic manufacturing, they’re likely to trigger unpredictable feedback loops that could lead to significant economic contradictions or even a geopolitical crisis.

In the US, rising consumer prices diminish workers’ purchasing power amid stagnant wages. Tariffs hit lower-income consumers hardest through price hikes, reinforcing socioeconomic inequalities.

Higher import costs raise consumer prices, benefiting corporate elites who can pass on these additional expenses. Internationally, consequences include market volatility, weakened multilateral institutions, disrupted supply chains, and potential retaliation.

The US tariff impositions led to a significant drop in global markets, with the Dow Jones Industrial Average falling 1,679 points – the largest decline since 2020. This raised investor concerns about the dollar’s weaponisation and the risks of escalating trade conflicts and affecting global economic stability.

The US’s unilateral tariff increases have undermined long-standing trade agreements. Furthermore, by framing trade deficits as a national security issue, Trump introduced unpredictability into diplomacy, promoting deglobalisation and weakening institutions like the World Trade Organisation.

This erosion complicates future trade negotiations and fosters an environment ripe for erratic policy changes and corporate-dominated governance.

Intermittent tariff hikes also upset global supply chains. Components of goods are often produced and assembled across multiple countries. A single tariff can disrupt entire industries reliant on these international networks, such as the fashion and automotive sectors.

Supply chain disruptions force multinational companies to reconfigure their operations and ‘restore’ production at staggering costs, consolidating power among tech oligarchs who can absorb these compliance costs.

Additionally, Trump’s mercantilist approach is spawning a wave of protectionism in other countries. Several affected countries are already enacting or considering retaliatory tariffs, complicating international trade relations further.

For example, China has condemned the tariffs as protectionist and detrimental, warning that their countermeasures could escalate trade tensions even more, and they have responded with tariff hikes of their own.

South Africa, as a semi-peripheral economy within the global capitalist system, is particularly vulnerable to the erratic behaviour of imperial core states. The imposed asymmetrical tariff hike undercuts concessions previously enjoyed under the African Growth and Opportunity Act (AGOA) as it will adversely affect the automotive, agriculture and chemical sectors.

The imposition of tariffs has also led to significant currency volatility. While this decision has serious implications for trade relations, it also highlights the long-standing imbalance in the partnership – one where economic expedience for the US often overrides equitable or ethical consideration for its African counterpart.

SA has played along with the AGOA framework for years, accepting conditions that sometimes undercut its own public health standards and policy priorities. Chief among these concessions is the importation of US poultry and meat products without US exporters having to pay anti-dumping duties ordinarily applicable to these goods despite not necessarily meeting South African sanitary and phytosanitary requirements.

These imports, pushed under the guise of fostering mutual economic growth, have been tolerated as part of the broader AGOA deal - an arrangement sold as beneficial but increasingly skewed in favour of US commercial interests. Now, with the imposition of punitive tariffs, Washington has effectively nullified the very basis of AGOA.

While the US was quick to penalise SA in sectors where it seeks to protect its local industry, it maintains unimpeded access to resources it cannot do without. The US entirely depends on SA’s chromium and imports over 25% of its manganese, titanium, and platinum.

Therefore, these minerals were exempted from the tariff hikes. In this lopsided arrangement, SA is expected to absorb economic shocks while supporting the US economy with its irreplaceable mineral wealth.

But, global demand for these minerals is not confined to the US. With strategic foresight, SA can realign its mineral exports toward markets that offer fairer terms. It should also forsake its commitments to the US under AGOA. Such a redirection would send a powerful message: trade relations must be built on respect and reciprocity.

Building strong domestic industries that don’t depend solely on preferential trade agreements can enhance economic resilience. Strategies could include investing in local manufacturing, diversifying export markets, and accelerating regional trade within Africa and the BRICS bloc for greater stability.

Active participation in international forums can also help advocate for fair trade practices and the effective management of disputes.

As Trump dismantles the old order, it raises the question of whether progressive movements can put aside their differences and take the opportunity to steer the country toward a more independent trajectory. Now is the moment for the country to assert its economic sovereignty and position itself as a key player in shaping the contours of a more equitable global trade system.

* Dr Reneva Fourie is a policy analyst specialising in governance, development and security and co-author of the book ‘The Art of Power: Pursuing Liberation and Nation-building’

** The views expressed do not necessarily reflect the views of IOL or Independent Media.