Rand nears R20/$ level as US tariffs, GNU fighting takes effect

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The South African rand is fast closing in on the R20/$ mark as the effects of US President Donald Trump’s tariffs and continued internal fighting hit home.

The rand breached the key R19 to the dollar mark last Friday afternoon.

That worsened considerably on Wednesday morning, currently trading at R19.70/$.

This depreciation is in part attributed to escalating tensions between the United States and South Africa, coupled with internal political instability.

Meanwhile, the rand hit its worst level ever against the British pound early on Wednesday morning, currently trading at R25.24/£.�

That means for every R1, you’ll get a little under 4p.

The previous highest level of R24.43 came at the end of May 2023, but in the last week that ‘record’ has been smashed on a daily basis.

Comprehensive evaluation of the bilateral relationship

US Congressman Ronny Jackson last Friday introduced the US-South Africa Bilateral Relations Review Act of 2025, aiming for a comprehensive evaluation of the bilateral relationship.

As reported by The South African website, the bill would mandate a full review of the bilateral relationship between the United States and South Africa and aims to impose sanctions on “corrupt South African government officials”.

This is on the basis that they support the United States’ enemies like China, Russiaand Iran.

In parallel, President Donald Trump announced a 10% global tariff on imports, with South Africa facing a higher rate of 30%.

These tariffs are expected to impact key sectors such as agriculture and automotive industries.

Donald Trump announced a global 10% tariff on all imports, and higher rates for a slew of ‘worst offenders’ - including South Africa. — ***Donald Trump announced a global 10% tariff on all imports, and higher rates for a slew of ‘worst offenders’ – including South Africa.***

GNU challenges

Domestically, the Government of National Unity (GNU) is facing internal discord, particularly between the ANCand the Democratic Alliance (DA).

The recent budget, which included a one-percentage-point VAT increase over the next two years and no adjustments to tax brackets, was achieved without full GNU consensus.

The DA opposed the tax hikes, leading to concerns about the coalition’s stability.

Market volatility

The convergence of US sanctions, increased tariffs, and internal political instability has intensified market volatility, leading to the rand’s depreciation.

Economists express concerns about the potential termination of the African Growth and Opportunity Act (AGOA), which currently provides duty-free access for certain African exports to the US.

The imposition of tariffs and potential sanctions could further strain South Africa’s economic relations and trade prospects.