How Trump’s Iran sanctions will hurt SA
The upshot of Donald Trump’s isolationist policies is likely to be greater inefficiency, softer global growth and higher inflation
US president Donald Trump’s decision to pull the US out of the Iran nuclear deal and reimpose sanctions has pushed oil prices above US$79/bbl for the first time since November 2014. Though Trump’s move will not affect supplies of oil to SA (SA stopped importing oil from Iran in 2012), higher rand oil prices are likely to have an effect on domestic inflation. It also means that companies worldwide must stop doing business with Iran or risk the ire of the US government. The net impact on corporate SA is hard to quantify. "For many companies, particularly in financial services, Iran is already a sanctioned country, which limits significant dealings with the country," says BNP Paribas economist Jeffrey Schultz. "On the other hand, some diversified industrial companies like Sasol should stand to benefit from higher global oil prices which have a direct impact on their bottom line." Airbus and Boeing are among the international companies that at first glance appear to be most negatively a...
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