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Twin disruptors at work — tariffs, AI and the future of employment

Tshilidzi Marwala and Letlhokwa Mpedi
By Tshilidzi Marwala and Letlhokwa Mpedi
28 May 2025
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AI and tariffs are intrinsically transnational phenomena, demanding regulatory responses that transcend national borders.

The global economy stands at a precipice, shaped by two interconnected forces: the resurgence of tariff-driven protectionism and the relentless advance of artificial intelligence (AI).

Together, these “twin disruptors” are changing the world of work, reshaping trade dynamics, recalibrating labour markets and challenging the social contract that underpins modern societies.

This presents a profound double disruption, compelling workers, employers, legislators and policymakers to confront urgent legal questions concerning rights, protections and regulatory obligations.

The new tariff terrain: a trade law perspective


Tariffs have re-emerged as an instrument of statecraft. Yet, their deployment is far from unfettered. It is governed by a robust international legal architecture, primarily the General Agreement on Tariffs and Trade under the World Trade Organization (WTO).

The increasing imposition of tariffs, particularly those justified under national security exemptions, is testing the limits of multilateral trade law. Disputes arising from such measures are before the WTO’s dispute settlement mechanism, underscoring the critical need for legal predictability in global commerce.

Tariff policy must adhere to the principles of administrative law, demanding transparency, thorough consultation and the minimisation of arbitrary or disproportionate impacts on affected sectors.

Crucially, workers displaced by tariff-induced shifts in global supply chains may have legitimate claims under existing labour statutes, advocating for “just transition” support or retraining guarantees to mitigate job losses.

AI and labour: legal gaps and governance challenges


The rapid integration of AI into the workplace introduces unprecedented complexities for labour law. Traditional legal protections – encompassing the right to fair labour practices, non-discrimination and safe working conditions – are severely strained by algorithmic decision-making’s pervasive influence.

For instance, automated hiring or performance management tools carry the inherent risk of inadvertently violating anti-discrimination laws, data protection legislation or even constitutional rights to dignity and equality.

In South Africa, these vital protections are enshrined in the Bill of Rights and further elaborated through key statutes like the Labour Relations Act, Employment Equity Act and the Protection of Personal Information Act.

Globally, the International Labour Organisation (ILO) has proactively begun to address these emerging challenges, advocating for a “human-centred” approach to the future of work and urging the adoption of new international standards that ensure algorithmic transparency and accountability in the workplace.

South Africa's lacklustre economic growth: a deep dive into persistent challenges


While South Africa holds significant potential as an emerging market with diversified industries and abundant natural resources, its economic growth has been persistently lacklustre, significantly hindering efforts to address challenges like high unemployment, poverty and inequality.

For more than a decade the country's GDP growth has averaged a mere 0.7% annually, a rate lower than its population growth, leading to declining real per capita income. This sustained underperformance is not merely a cyclical downturn, but a symptom of deep-seated structural issues and governance weaknesses.

One of the most critical impediments to South Africa’s economic vitality is the energy crisis, primarily driven by the ailing state-owned power utility, Eskom. The result is load shedding – scheduled and unscheduled power outages that cripple businesses, disrupt daily life and deter investment.

These power cuts have cost the economy billions of rands annually, forced small businesses to collapse and significantly reduced productivity across all sectors, from mining to manufacturing and retail. The impact extends to agriculture, where food processing delays lead to substantial losses, and even to the digital economy, with projected losses in the billions.

While there have been recent improvements in electricity supply, the long-term shadow of energy insecurity continues to loom large over the economy.

Beyond the energy woes, other structural rigidities contribute to the anaemic growth. The country’s transport and logistics infrastructure, particularly rail and port operations, is in disrepair. This directly hinders export capacity and increases operational costs for businesses.

Furthermore, a weak business environment, characterised by administrative burdens, stifles entrepreneurship and job creation, especially for small and medium-sized enterprises (SMEs) which are vital for employment. Despite efforts to improve the ease of doing business, reform has been slow.

The public sector wage bill significantly strains national finances, diverting funds that could otherwise be invested in critical infrastructure or economic stimulus programmes. 

The cumulative effect of these challenges is a staggering unemployment rate, consistently among the highest in the world. In the first quarter of 2025, the overall unemployment rate climbed to 32.9%, with youth unemployment reaching an alarming 62.4%.

This highlights a fundamental disconnect between the available workforce and the economy’s capacity to create jobs, often exacerbated by a mismatch between skills and industry demands. The labour costs and insufficient demand also influence businesses’ reluctance to expand their workforce.

Addressing South Africa’s lacklustre economic growth requires a comprehensive and sustained effort. This includes accelerating structural reforms in the energy and logistics sectors, enhancing the business environment to foster private sector investment and SME growth, improving effective and efficient governance, and implementing labour market reforms promoting job creation and addressing skill mismatches.

Without such action, South Africa risks remaining trapped in a cycle of low growth, high unemployment and persistent inequality.

The dual pressures of shifting tariffs and accelerating AI adoption intersect with entrenched structural inequalities in South Africa. South Africa bears a constitutional obligation to progressively realise socioeconomic rights, which, it is argued, impose positive duties on the state to proactively create enabling conditions for employment and skills development, particularly as traditional job pathways face obsolescence.

If unchecked, the unmitigated displacement of mid-skilled jobs due to automation and evolving trade flows could seriously violate the state’s duty to achieve these fundamental rights progressively.

To comply with these constitutional mandates, legal strategies such as those aimed at developing sectoral master plans, inclusive procurement policies and robust public-private retraining partnerships are imperative.

Furthermore, South Africa’s international obligations under instruments such as the African Charter on Human and Peoples’ Rights and the UN’s Sustainable Development Goals reinforce the critical need for labour market policies that actively promote equity, sustainability and decent work for all.

AI and tariffs are intrinsically transnational phenomena, demanding regulatory responses that transcend national borders. There is an urgent and pressing need for new global frameworks to address emerging digital labour rights, facilitate cross-border data governance, and ensure corporate accountability across complex global supply chains.

Legal fragmentation will exacerbate inequalities between jurisdictions. Multinational firms may exploit regulatory arbitrage without coordinated frameworks to circumvent vital labour protections.

Multilateral cooperation, channelled through institutions such as the WTO, ILO, UN and regional bodies like the African Union, is essential to ensure that legal protections keep pace with and actively guide technological and economic transformation towards equitable outcomes.

Towards a legally grounded future of work


The future of work in a world shaped by tariffs and AI will not be passively determined by technology or market forces alone. Crucially, it will be shaped by the legal frameworks we construct, our institutional choices and the political will we summon.

If legal systems remain passive, they risk complicating inequality and eroding fundamental rights. Conversely, if boldly and strategically mobilised, law can be a powerful tool to steer disruption towards shared prosperity and a more just future.

The imperative is clear: we must urgently update labour, trade and constitutional laws for a world where borders and algorithms increasingly define the boundaries of opportunity and risk.

Legal certainty, fundamental fairness and human dignity must serve as the unshakeable foundations upon which we construct the new world of work. DM

The authors’ latest book on this subject is Artificial Intelligence and the Law (Palgrave Macmillan, 2024).

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