Huge Relief as Trump Pauses 30% Tariff on South Africa for 90 Days

South African businesses and financial markets have been handed a much-needed breather after US President Donald Trump announced a temporary pause on heightened tariffs, easing the pressure on local exports and the rand.

Trump revealed that tariffs on countries previously flagged as “worst offenders” – including South Africa – would be scaled back to the global baseline of 10% for the next 90 days. China, however, is excluded from the reprieve, with the US escalating its tariff war to an eye-watering 125% rate on Chinese imports.

The US president made the announcement on social media, stating that more than 75 countries had reached out to US representatives to find a resolution to mounting trade tensions.

“Due to these discussions, I am authorising a 90-day pause on all tariffs above 10%, except on China,” Trump said.

South Africa Breathes a Sigh of Relief

South Africa had been hit with a 30% tariff on key exports to the US, causing anxiety across local industries and contributing to currency turmoil. Wednesday saw the rand plummet to its weakest point in history against the dollar, briefly hitting R19.93 before closing slightly stronger at R19.84.

Following Trump’s announcement, the rand rallied by 2%, recovering to R19.34.

The temporary rollback is expected to offer some stability in a time of political and economic turbulence. Analysts, however, warn that the global trade environment remains deeply unsettled.

China Faces Steep Tariff Hike

While most nations caught a break, the US doubled down on its trade war with China. After Beijing retaliated to earlier tariffs, the US upped the ante again on Wednesday, taking tariffs to 104%, and now – effective immediately – to 125%.

“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%,” Trump said.

He added that the US would no longer tolerate being “ripped off” by China and other countries.

Economic Concerns Remain

Arthur Kamp, Chief Economist at Sanlam Investments, noted that even a temporary reversion to the baseline 10% tariff still represents a massive shake-up to global trade norms.

“This has been a material jolt to the global trade system. If this pattern continues, especially with China, the implications could be dire,” Kamp warned.

Despite the short-term relief, Kamp and other economists remain cautious, pointing out that a prolonged trade conflict – especially involving China – could tip the global economy toward a recession.

What’s Next?

With only a 90-day pause in effect, South Africa must brace for renewed uncertainty down the line. For now, however, exporters, investors, and currency traders are welcoming the breathing room.

The next three months will be crucial as diplomatic efforts continue behind the scenes. Whether this pause turns into a permanent solution or another temporary fix remains to be seen.

{Source BusinessTech}

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