An interface between two of the largest economies, which has thus far resulted in tit-for-tat trade levies, will likely impact South Africa, says one economist.
There are concerns by some economists that recent heated exchanges between US President Donald Trump and China could lead to a calamitous trade war.
In March 2018, Trump signed a proclamation that would see the implementation of new trade policies. This includes tariffs of between 10 to 25% on Chinese imports such as steel and aluminum, a move which the US aims hopes will balance an almost $500 billion annual trade deficit between two countries.
Dr Azar Jammine who is Director and Chief Economist at Econometrix told Political Analysis South Africa on Thursday, 12 April 2018 that the ordinary man on the ground could be negatively impacted by the tit-for-tat exchanges between the two world powers.
“Indirectly economic growth might get cut to be lower than previously believed, less employment creation and less opportunity. It implies a lower standard on living,” he said.
Jammine said that even though South Africa is a relatively small player in the global economy compared to the US and China, it would nevertheless still be impacted by aftershocks of a trade war.
“It could damage global economic growth. It would indirectly affect South Africa. It would cause monetary prices to possibly reduce. It could lower economic growth that would negatively impact South Africa’s export areas,” he said.
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