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Sarel Van Der Walt's avatar

Trump’s tariff rate calculations is economically stupid, but politically simple. Ordinary Joe or Karen in the street will understand it, even defend it, no matter what economists argue. I’ve had similar economically illiterate arguments with people in the past.

My few notes on this:

- key principle for a response must be to minimise harm to SA producers & consumers, taking into account who in SA import goods from the US & export to the US. E.g. could SA levy a surcharge on all USD forex transactions of say 0.5%-1%? Or maybe additional charge of 5%-10% for import of any US services, including finance? Ideally the repsonse should be less punitive but more supportive of SA industry where possible.

- government should assist SA producers to seek alternative markets for SA goods, & best to look at markets which are supplied by exports from the US (eg Africa & mid-east)

- lots of goods from all over the world which were exported to the US may now look for alternative markets, incl. vehicles from Europe, clothing from Bangladesh & Vietnam, etc. this could lead to them “dumping” these in SA, so we should implement policies to prevent/minimise this as much as possible.

- the global environment is as good as its ever been to resolve the Denel situation, either through partial privatisation, sub licensing Denel IP &/ sub-lease Denel production capacity for foreign defence manufacturers, etc. taking into account global & regional geopolitics.

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The Optimist's avatar

Trump's single minded focus on trade deficit as metric is puzzling to me. I have a very successful 100% trade deficit with my local grocery store.

Not having to spend my entire day raising my own chickens, milking my own cows, and growing my own wheat frees me up to do much more profitable things. Both me and my grocer benefit. If we didn't, there would be no transaction.

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