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Navigating new trade realities: The impact of US Tariffs on Namibia and the region

by editor
April 7, 2025
in Opinions
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By Frederick Muller

On April 2, 2025, US President Donald Trump announced a sweeping new tariff regime that has sent ripples through global markets and international trade corridors.

The policy introduces a universal baseline tariff of 10% on all US imports, effective from April 5, 2025, with targeted surcharges—including a hefty 30% tariff on South African goods.

Namibia, too, has not been spared. Under the new reciprocal tariff framework, Namibian exports to the US will now face a 21% levy, mirroring our own 42% import duty on US goods.

This policy shift signals a potentially significant recalibration of Namibia’s trade dynamics with the US. In 2024, Namibia exported goods worth approximately N$4.9 billion to the US, including diamonds, dimension stone, and fish products. Imports from the US amounted to around N$2.8 billion.

The imposition of tariffs on Namibian goods will raise export costs and, inevitably, erode our competitiveness in a critical market.

The Broader Economic Impact

Beyond Namibia, South Africa stands to feel the brunt of these tariffs even more acutely. The US is South Africa’s second-largest trading partner, and in 2024, exports to the US were valued at approximately R40 billion.

A large proportion of these exports come from the automotive sector, which comprises more than 5% of the country’s GDP and supports over 115,000 jobs. The 30% tariff will price many South African goods out of the US market, impacting revenue and employment, particularly in export-driven sectors.

In retaliation, South Africa may introduce reciprocal tariffs on US goods—potentially triggering a broader escalation in trade tensions. This could result in increased costs for South African consumers and businesses and further disrupt regional supply chains.

The South African government is already seeking to negotiate a new bilateral trade agreement with the US in an effort to de-escalate tensions and restore certainty. Such negotiations underscore the urgency of crafting mutually beneficial trade frameworks in an increasingly fragmented global economy.

Market Reactions and Investment Considerations

Unsurprisingly, financial markets have reacted strongly to this policy announcement. The final week of March and the first days of April have seen significant sell-offs across both local and global equity markets. Meanwhile, the Namibian dollar and South African rand have depreciated sharply against the US dollar and other major currencies.

This heightened market volatility is symptomatic of broader investor uncertainty, and it may persist as global markets digest the implications of the new trade environment. Inflationary pressures are also expected to rise, adding further complexity to an already challenging economic backdrop.

Alexforbes’ Strategic Response

At Alexforbes, we believe in long-term, diversified investment strategies that are built to weather exactly this kind of storm. Our philosophy of purposeful diversification ensures that your investments are not overly concentrated in any one region, asset class, or industry.

In response to the recent tariff announcements, our investment team is conducting in-depth analyses to assess the likely economic and market impacts. We are reviewing sector and regional exposures, recalibrating asset allocations where necessary, and identifying new opportunities that may arise from shifts in global trade flows.

While the immediate outlook may appear uncertain, it’s important to remember that moments of disruption can also be times of opportunity. Our role is to remain steadfast stewards of your capital—continuously scanning the horizon, making prudent adjustments, and ensuring that your portfolio remains aligned with your long-term goals.

If you have any questions or would like to discuss how these developments might impact your personal investment strategy, I encourage you to reach out to your Alexforbes adviser or servicing consultant.

*Frederick Muller is Managing Director at Alexforbes Investments Namibia

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