South Africa will pay the price for Trump’s tariffs

Those South African fans of Donald Trump would do well to ponder – as they crow about him “sticking it to the ANC” – what is known as the “law of unintended consequences”, which means they themselves will end up being punished, though they may not be his target.

The US president’s own supporters at home will slowly start to realise that his radical programme to “Make America Great Again” could end up punishing them.

His tariff regime will make, for example, steel imports from Canada and China more expensive for American manufacturers, which will inevitably drive up prices in the US.

The same will happen here. If, as many Trump supporters here hope, Washington does not renew the African Growth and Opportunity Act (Agoa) in September, then tens of thousands of South African jobs could be lost – and that will hit everybody.

And, lest we forget, not everybody will be able to get on the refugee flights to America.

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Many of those jobs would be forfeited in our car assembly industry, which exports vehicles worth about $1.9 billion every year, many to the United States. These exports account for 22% of all goods we send to the US.

The law of unintended consequences applies to this, too, because one of the companies which will be hardest hit will be Ford, which is American-owned and has a massive world-class factory outside Pretoria and into which it recently invested more than $1 billion.

The resulting affordability gap in the car market in the US will be filled by Chinese vehicles, which benefit from many actual and hidden subsidies by the Beijing government.

In other words, Trump is doing more damage than good to his own country, while sowing economic destruction willy-nilly elsewhere, like South Africa.

Trump is a wrecking ball – and wrecking balls don’t have friends.

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