SA business needs congenial friends

Karma is not a term normally applied to the reality-focused world of international trade – but could be said to have come around to South Africa following the news this week that US President Donald Trump’s administration would not be granting an exemption from new, higher, import tariffs to this country’s steel and aluminium products.

Reports say the American tariffs could lead to the loss of 7 500 jobs in the South African steel and aluminium industries.

In international trade, sometimes it is a case of “what goes around comes around” – whether you call it karma or not.

That is because in the early 1990s, South African government-subsidised exports to our neighbours – and in particular Zimbabwe – saw thousands of jobs lost in the battery, tyre and textile industries in that country, which played a role in triggering that country’s economic decline.

At the same time, SA was sending artificially cheap goods north of the Limpopo and imposing harsh tariffs on Zimbabwean imports like clothing in order to protect its own garment industry which has, ironically, since been swamped by Chinese imports.

Despite the moves towards unified global markets, many countries still have protectionist regimes in place – and they will offer preferential deals to those nations they perceive as their friends.

That is the most worrying aspect of this American tariff announcement: clearly the Trump White House does not regard South Africa in an especially friendly way. Perhaps that is because, over the years, SA has taken stands as a government against different aspects of US foreign policy. Perhaps it’s just because, in the grander scheme of things, South Africa is almost irrelevant to Washington.

SA needs to learn to develop alternative markets if it is to survive as an industrial nation.