JOHANNESBURG: The South African rand was steady on Tuesday, buoyed by hopes the country could still salvage a less damaging trade deal with the United States after President Donald Trump extended a tariff deadline to August 1.
Trump informed Pretoria and more than a dozen other trading partners of sharply higher trade levies in a wave of letters sent out on Monday. South Africa is facing a 30% trade tariff on its exports to the U.S., but the extended deadline has opened a window for further negotiations.
At 1351 GMT, the rand traded at 17.8150 against the dollar , up roughly 0.3% on Monday’s close, seemingly clawing back some of its losses after falling well over 1%.
The risk-sensitive currency was already reeling after Trump threatened an additional 10% tariff on any country aligning with what he called the “Anti-American policies” of the BRICS group of big emerging markets, which South Africa is a member of.
The U.S. is South Africa’s second-largest bilateral trading partner after China. In addition to minerals, car parts and other manufactured goods, South Africa exports agricultural products to the U.S. and stands to lose about 35,000 jobs in the citrus industry if the tariffs take effect.
South African rand falls, US bill and tariff updates in focus
South African President Cyril Ramaphosa said the 30% tariff rate is not an accurate representation of available trade data, though negotiations between the two nations will continue.
Ramaphosa also urged South African companies to diversify their customer base beyond the U.S.
“While strategically sound, this is not an easy shift to make in the short term,” said George Herman, Chief Investment Officer at Citadel.
“It’s difficult to see what bargaining power South Africa holds, especially given U.S. President Donald Trump’s negatively biased view…”
Trump confronted Ramaphosa earlier this year with false claims of white genocide and land seizures and has criticised South Africa’s genocide court case against Israel.
The Johannesburg Stock Exchange’s Top-40 index was last up 0.2%.
South Africa’s benchmark 2035 government bond was weaker, as the yield rose 5.5 basis points to 9.88%.
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