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US President Mr Donald Trump imposed a 30 percent tariff on South African goods entering the US on the basis that South Africa imposes a 60 percent reciprocal tariff on US goods entering SA.
This looks generous since the US is levying tariffs at half the rate applied by SA.
But this is nowhere near accurate. XA Global Trade Advisors CEO Mr Donald MacKay says the average applied by SA on US goods (and those from other countries) is closer to 7.5 percent.
Other countries slapped with higher tariffs by the US administration are equally perplexed at the tariff levels they are supposedly levying on US goods. The Financial Times reports how the US came up with these figures:
“Here’s what the White House and its crack team of trade investigators seem to have done: Take the US’s goods trade deficit with any particular country and divide it by the total amount of goods imported from that country. Cut that percentage in half, and there’s the US’s ‘reciprocal’ tariff rate,” says the FT.
On Wednesday, Mr Trump announced a baseline 10 percent tariff on all goods entering the US, with higher reciprocal tariffs on those countries deemed to impose high trade barriers on US goods. The US slapped China with a 34 percent reciprocal tariff, Japan with 24 percent, and South Korea with 25 percent. Brazil, a competitor in many markets to SA, got off lightly with a 10 percent tariff. Mr MacKay says following Mr Trump’s logic of applying tariffs at half the level imposed by any particular country, SA should be paying 3.75 percent, not 30 percent. – oneyweb.co.za
Online Reporter