Chart of the Week

Tariffs and the global trading regime have been a driver of uncertainty for investors this year, triggering a market crash and sending shattering investor sentiment in Apr ‘25. During this period, the United States and China entered a brief tariff war, escalating tensions before ultimately de-escalating. In the middle of May, Trump declared a 90-day delay on all new tariff measures, which helped calm things (temporarily) and allowed diplomatic engagement. That grace period came to an end on 9 Jul ‘25, at which point President Trump confirmed the implementation of a fresh round of reciprocal tariffs. However, these were again paused, pushing the new start date to 1 Aug ‘25. So far, Trump’s strategy has involved targeting key sectors like raw minerals, automotives and pharmaceuticals. These were set to face steep reciprocal tariffs: 50% on copper and other minerals, 25.0% on cars and parts, and 200% on pharmaceuticals. These measures took effect on 1 Aug ’25, although taking different shapes from initial proposals. South African goods have received a 30.0% tariff, while Namibian exports to the US (albeit it limited) will see 15.0%.While the outcome remains somewhat uncertain, it is increasingly likely that the most aggressive tariffs will be selectively applied only to those countries that fail to reach new trade agreements with the United States. For others, the administration may simply maintain a baseline tariff, most likely the 10.0% minimum that has already been imposed across much of America’s trading network.The tariff imposition is likely to have a burden on global economic growth. The US and EU reached an asymmetrical conclusion. EU exports to the US will have a 15.0% tariff imposed, while US exports will have no tariffs imposed, along with the EU increasing energy and military alignment with the US. The new tariffs are likely to have the largest impact on Europe’s largest economy, Germany, which runs a large trade surplus with the US – mainly comprising vehicle and pharmaceutical exports. The impact on growth of the newly introduced tariffs will likely be exacerbated by softer global demand and muted private sector investment.

Chart of the Week

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Namibian Sun 2025-08-05

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Chart of the Week

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Namibian Sun 2025-08-05

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