Donald Trump's proposed tariffs may lead to soaring prices in South Africa.
Image: Peter Zay / AFP
The new tariffs proposed by US President Donald Trump will have a resounding impact on Africa, particularly South Africa and the rand, FirstRand CEO Mary Vilakazi said.
Vilakazi noted that the tariffs will most likely increase prices in SA, leading to a stronger dollar and a weaker rand.
She said that Trump’s tariffs will hurt African nations that are carrying higher debt loads.
The FirstRand CEO made these comments to Bloomberg TV while attending the World Economic Forum (WEF) in Davos, Switzerland.
"We worry about the inflationary impact that the tariffs and the other policies that I think are going to be driven by the US," Vilakazi explained.
"We still have to watch the execution of what Trump says. One has to ensure we don't completely get ahead of ourselves," she said cautiously.
She added that South Africa could dodge Trump’s economic bullet if the Government of National Unity (GNU) continues to prioritise GDP growth and make structural reforms a major priority.
"The government of national unity has its own vulnerabilities, but I think beyond what plays out in public, there is a real commitment to make sure things work," Vilakazi said.
"Business is rallying behind and supporting the government's agenda."
Last week, in a video speech to the WEF delegates Trump emphasised that he would "demand that interest rates drop immediately".
The US president also indicated that he would put pressure on Saudi Arabia and the Organisation of the Petroleum Exporting Countries (OPEC) to reduce oil prices.
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