MEDUPI LAMOLA | Why SA’s greatest competitive advantage lies at home

The US’s decision to impose a12.5% tariffon selected South African exports effective from July 24 should not be viewed simply as another trade dispute. It is a stark reminder that global commerce has entered a new era, one in which markets are increasingly influenced by geopolitics rather than economics. For decades, countries competed primarily on productivity, comparative advantage and price.

Today, political alignment, strategic interests and national security concerns increasingly determine access to markets. Trade has become an extension of foreign policy. SA cannot change this reality.

What it can change is how it positions itself within it. This is no longer just a trade conversation. It is fundamentally a marketing challenge.

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Countries, much like organisations, compete for investment, talent, technology and confidence. Every policy decision, infrastructure investment, diplomatic engagement and regulatory reform contributes to a country’s brand. The question is no longer whether SA has world-class opportunities.

The question is whether the world believes it is the easiest, safest and most reliable place in which to invest. “Leadership on the continent cannot coexist with narratives that alienate the very partners with whom we seek deeper economic integration.” Tariffs undoubtedly increase costs for exporters and reduce competitiveness in affected sectors. Businesses that depend heavily on the US market may experience declining orders, delayed investment decisions and shrinking profit margins.

While the economy is unlikely to experience an immediate collapse, the cumulative effect of constrained exports is likely to be felt elsewhere, and that is in employment. SA already faces one of the highest unemployment rates in the world. Export-orientated industries such as manufacturing, agriculture,automotive productionand mineral beneficiation support thousands of direct and indirect jobs.

When exports become more expensive, firms often respond by reducing production, postponing expansion or freezing recruitment. In some instances, retrenchments become unavoidable. The greatest cost of tariffs, therefore, may not be measured in customs duties but in lost livelihoods.

This makes economic competitiveness not merely a business issue but a social imperative. Yet external pressures should not distract us from confronting our own internal constraints. It is tempting to point fingers at shifting geopolitical dynamics, but investors make decisions based on factors far closer to home.

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