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With NAFTA trade discussions going on, we have decided to take a look at South Africa's trade with NAFTA and in particular South African exports of steel and related products into the USA, which president Trump has stated the USA needs to raise tariffs on in order to protect local steel industry. For those who dont know, NAFTA is an acronym for North American Free Trade Agreement.
Concerning for world trade is the continuing trend of protectionism after years of globalisation and tariff reductions. All of this as more populist leaders the world over win elections and punting protectionism as one of the ways to protect local economies. |
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South Africa's Exports to NAFTA for January 2018
The graphic below shows the exports by South Africa to the NAFTA countries (Canada, Mexico and the United States of America). And as the graphic below shows trade with the USA dominates that of the other two countries.
Precious metals such as platinum and gold dominated South African exports to the United States with a total vallue of R1.58billion. A close second was products of Iron and Steel exports to the United States with a export value of around R1.3billion. While the biggest export from South Africa to Canada was vegetables with a trade value of R113million and the biggest export from South Africa to Mexico was Mineral products with a value of R134million.
South African imports from NAFTA countries for January 2018
The graphic below shows the imports into South Africa for January 2018 from the three NAFTA countries.
Interesting to note that the biggest import for South Africa from all three NAFTA countries is Machinery. South Africa imported R171 million in Machinery from Canada, R291 million from Mexico and R1.56billion in Machinery from the United States of America. It is no surprise that South Africa imports machinery from NAFTA countries and that it is a big import from this region. As we have shown in the past, South Africa imports a lot of machinery from Germany, China, France etc.
South Africa's Trade Balance with NAFTA countries for January 2018
The graphic below shows the trade balance (Exports - Imports) per NAFTA country per product for January 2018.
South Africa had the following Trade Balances with the three NAFTA countries for January 2018
South Africa had a negative trade balance with both Canada and Mexico and a positive trade balance with the United States. And the majority of South Africa's positive trade balance with the United States is made up by precious metals and products of iron and steel. Showing that president Trump might be right in wanting to protect local industries from cheap steel and iron imports into the USA. While we do not agree with a trade war in terms of tariff increases and retaliation tariff increases which leads to trade wars and increased costs as imported goods becomes more expensive, we do see Trump's argument that trade in certain goods with the US might be skewed in favour of others instead of being more balanced.
While South Africa is a relatively small trading partner with the USA, its positive trade balance with the USA is rather substantial, while the other two NAFTA countries (Canada and Mexico) benefits greatly from trade with South Africa. South Africa has a negative trade balance of R563 million with those two countries in one month.
The image below shows the trade balance per NAFTA country per product type for January 2018.
- Canada: -R113million
- Mexico: -R450million
- United States of America: R262million
South Africa had a negative trade balance with both Canada and Mexico and a positive trade balance with the United States. And the majority of South Africa's positive trade balance with the United States is made up by precious metals and products of iron and steel. Showing that president Trump might be right in wanting to protect local industries from cheap steel and iron imports into the USA. While we do not agree with a trade war in terms of tariff increases and retaliation tariff increases which leads to trade wars and increased costs as imported goods becomes more expensive, we do see Trump's argument that trade in certain goods with the US might be skewed in favour of others instead of being more balanced.
While South Africa is a relatively small trading partner with the USA, its positive trade balance with the USA is rather substantial, while the other two NAFTA countries (Canada and Mexico) benefits greatly from trade with South Africa. South Africa has a negative trade balance of R563 million with those two countries in one month.
The image below shows the trade balance per NAFTA country per product type for January 2018.
The image above shows that while South Africa has a significantly positive trade balance with the USA for precious metals and products and iron and steel it has a very negative trade balance in Machinery not only with the USA but with Mexico and Canada too, A surprising observation from the above is the fact that South Africa has a negative trade balance with Mexico in vegetables(granted its a small R873 thousand) while it has strong positive trade balances in vegetables with Canada (R105million) and United States of America (R11.8million) .
Another product group where South Africa has very negative trade balance with all three NAFTA countries is Photographic & medical equipment. With a R6.8million deficit with Canada, R47.3million deficit with Mexico and R453million deficit in this category with the United States.
More NAFTA trade statistics information to follow in the next couple of days.
Another product group where South Africa has very negative trade balance with all three NAFTA countries is Photographic & medical equipment. With a R6.8million deficit with Canada, R47.3million deficit with Mexico and R453million deficit in this category with the United States.
More NAFTA trade statistics information to follow in the next couple of days.
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