US President Donald Trump
Image: Facebook/White House
Although South Africa’s richest billionaires mostly escaped the market rout caused by US President Donald Trump’s trade tariff vacillation, thousands of jobs could be at risk in the world’s most income-unequal country.
Trump last week caused a massive rout in global stock exchanges, with the rand and JSE’s All Share Index were not immune. The US President announced massive and sweeping tariffs that shocked the world before walking back some of the import duties.
International billionaires were hard hit. While Pretoria-born Elon Musk remains the world’s richest man, with a portfolio worth $311 billion (almost R6 trillion) according to Bloomberg’s Billionaire’s Index, he has lost $121bn in wealth this year. To put that in perspective, last year, South Africa’s total gross domestic product was R4.6 trillion.
Musk is tight with Trump and is soon stepping down from a position in Trump’s administration seemingly created for him to cut costs at US Federal Agencies.
Other names on Bloomberg’s list include Amazon.com founder Jeff Bezos as well as Facebook’s creator, Mark Zuckerberg.
Locally, at 148 on Bloomberg’s list, is Johan Rupert and his family with a portfolio of $10.6 billion – a figure that increased $181 million this year. Rupert and his family is followed by former De Beers chairman Nicky Oppenheimer, who has seen his fortune decline $150m this year to $10.6bn.
Oppenheimer is followed by Natie Kirsh, who is the last South African on Bloomberg’s list. 93-year-old Kirsh earned most of his value from New York state cash and carry operation Jetro Holdings, owner of Restaurant Depot and Jetro Cash & Carry.
At the other end of the scale are South Africa’s poor. The World Population Review’s chart shows that South Africa is the most inequal country in the world. Although the average earning per person each day is higher than that of countries such as Namibia and Nigeria, it is still under $1 a day.
According to Statistics South Africa, average monthly earnings for November last year, the latest available figure, was R28 231.
As a result of Trump’s tariffs as well as the fact that a preferential trade agreement in the form of the African Growth and Opportunity Act could be scrapped, thousands of jobs could be on the line.
This is in addition to economists downgrading South Africa’s economic outlook. Investec chief economist Annabel Bishop has already dropped South Africa’s economic growth outlook to 1.3% for this year from the 1.8% it anticipated at the start of the year. This decline prices in tariffs before they were implemented.
South Africa is likely to escape the recession that will undoubtedly hit the US according to Old Mutual chief economist Johann Els, who has also dropped South Africa’s economic outlook.
The Bloomberg consensus for gross domestic growth has fallen to 1.5% from 1.7%. Prior to the implementation of tariffs, the South African Reserve Bank anticipated gross domestic growth of 1.9% compared with the 0.6% seen last year.
There is currently no indication of how many jobs will be affected in the automotive industry, although industry body Naamsa indicates that five to six percent of local cars are sent to the US each year. Trade, Industry, and Competition data states that more than 100,000 people are employed in the automotive manufacturing sector through companies such as companies such as BMW and Mercedes-Benz.
Meanwhile, South Africa’s agricultural industry could lose a market worth $8.21bn, based on the value of exports to the US according to the latest Trading Economics figures. In 2024, South Africa exported $13.7bn in farmed products. The Agricultural Business Chamber of South Africa puts jobs in this sector at almost a million.
IOL