SA Reserve Bank governor Lesetja Kganyago has warned against a knee-jerk reaction to newly imposed (and now paused) US tariffs, urging the country to focus on improving competitiveness rather than resorting to protectionist measures.
In a strongly worded response to a question at the Bank’s Monetary Policy Forum in Sandton last week, Kganyago cautioned that retaliating with tariffs of SA’s own would not only be economically self-defeating but would also ignore the lessons of the past decade.
“We cannot even think that we could respond to the US tariffs by imposing tariffs ourselves,” he said.
“At some point, I had warned: don’t think you can do this and assume that the others would not do it.”
He said that SA was now facing the consequences of these earlier actions.
In the context of global trade dynamics, countries affected by US tariffs may seek alternative markets — including SA — to export their goods. If SA responds by imposing its own tariffs to protect local industries, it could trigger reciprocal measures from those countries, leading to more trade conflict.
Kganyago said that if SA thinks it can increase tariffs to protect and grow its own industry, then “we have been spectacular failures, because we have imposed these tariffs since 2009. We are in 2025, and we are still complaining about it.”
“(Imposing tariffs) means that we are assuming those countries will not react either — and they will react.”
“Forget the calculation of how accurate it is that we have tariffs against US manufacturing and all of that. The truth of the matter is that we have been increasing our tariffs since 2009. We had increased it in different sectors. A tariff war is something that no country will win. We can only all be losers.”
Kganyago’s remarks come amid growing global trade friction after the US introduced (and then paused) sweeping tariffs under its new “Liberation Day” trade framework — including 31% tariffs on SA — raising concerns over the future of multilateral trade agreements and preferential deals such as the African Growth & Opportunity Act (Agoa), which supports a portion of SA exports to the US.
A tariff war is something that no country will win. We can only all be losers.
— Lesetja Kganyago, SA Reserve Bank governor
Theo Janse van Rensburg, head of macro forecasting in the Bank’s economic research department, told the forum that 7.5% of SA’s exports go to the US, with 25% of those benefiting from Agoa.
The governor stressed the need for SA to ask difficult questions and shift the national conversation towards solutions that enhance productivity, skills, and innovation.
“If you want to play in the big league, you play according to the rules of the big league, and the rules of the big league are that you have got to build competitiveness.”
He argued that tariffs ultimately harm domestic consumers and businesses more than foreign exporters. Using steel imports from China as an example, he explained that when SA imposes tariffs, it is not the Chinese exporter who pays, but the SA importer.
“The question is, why is China producing steel cheaper than us? Do they have better technology? Do they have better skills? And if they do, our response should be to get better technology and develop better skills,” he said.
According to the governor, SA’s response to the US tariffs has so far been “measured”.
“(We) say that this is a tariff war that is taking place. We are not part of it. And as we say in my language, if two giants are fighting, don’t try to come in between them. Sit on the side, because you are not as strong as them. That’s what we’ll do.”
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