PETER BRUCE | Agoa is the least of our worries

There is a lot of trilling at the top of our government about how unlikely the Americans are to keep us in Agoa, the African trade programme that cuts the import duties on our exports to the US if we’re in favour in Washington. We have, for a variety of reasons, fallen foul of the current US president, Donald Trump, but Agoa is up for renewal from next year, and people reckon our time is up.

You’d think, to hear commentators and politicians talking about losing our rights to Agoa, that being cut off from it is some kind of death sentence. The white right takes a quiet pleasure in Trump’s coming requital for all our sins of commission and omission, while the left seems sometimes borderline hysterical about the prospect of No Agoa.

But, and you’ll have to trust me, Agoa is no big deal. It’s just a tax break and, in our case, not a very big one. In fact, if we lose our “access” to Agoa, if we are “kicked out” of Agoa, it doesn’t cost South Africa a single cent. It would, however, cost American importers of goods from South Africa a maximum of R2bn in new US import duties — that is the total saving they are making now on importing from us under Agoa.

R2bn is precious little. The ANC makes money like that vanish in a heartbeat. Elon Musk has spent more on campaign donations to Trump candidates in the approaching midterm elections. It is what Starbucks founder Howard Schultz paid for his starter superyacht.

I guess where the loss of Agoa might make a difference is that — because everyone already thinks it’s more important than it is — we can all treat it terribly seriously if it ever happens and consider ourselves properly punished or victimised.

What is truly astonishing, though, is the extent to which commentary and reportage fixates on the damage Trump might cause us and the damage the Chinese are causing us.

We are so pleased to be able to sell avocados, oranges and cherries into China in 2026 that we lose track altogether of what Beijing is doing in the world and to us

If you were to rank the threats to manufacturing in this country, they would start with high electricity tariffs followed by cheap Chinese imports and then grandiose and useless racial industrial policy initiatives or sham strategies like “saving” steel.

The Americans are nowhere on this list. They remain, in fact, our single most valuable trading partner, importing vehicles and other value-added goods that give us, even now, a bilateral trade surplus we will never achieve with China.

Yet, because the Chinese swamp us with everything from paper clips to electric cars, we crown them as “our biggest trading partner”, as if it were an accolade. We are so pleased to be able to sell avocados, oranges and cherries into China this year that we lose track altogether of the harm Beijing is doing in the world and to us.

Basically, China is manufacturing everything, leaving little for other countries to pick up. As the Industrial Development Corporation here prepares to spend around R7bn buying back a bankrupt ArcelorMittal South Africa (formerly Iscor), the Chinese continue to expand their own domestic steel capability.

They can produce as much steel in a week as Germany can in half a year. And what they can’t use, they put on ships to roam the seas until they find a willing buyer. The same goes for cars, which the Chinese now ship in their thousands without firm orders.

And if you were Bangladesh, thinking you had a shot at old Chinese textiles markets, forget it. The Chinese still produce vastly more fabric than the Bangladeshis.

“All this is the consequence of President Xi Jinping’s ‘dual strategy’,” wrote former UK prime minister Rishi Sunak last weekend. “Its aim is to make the world dependent on China while China depends on no-one. The sheer size of China’s industrial capacity means there’s no end in sight.

“China has the capacity to meet almost two-thirds of the world’s demand for cars and 100% of EV [electric vehicle] demand. By the end of this August, Chinese car exports had already exceeded last year’s record.”

Obviously, as the world continues to fragment, the way small economies like ours survive is to not fall in with either big power. That’s not always easy because the Chinese, in particular, have such a large market to dangle in front of even low-value-added South African products. Fortunately, by and large, our trade policies have been measured and careful.

That can’t be said of industrial policy. As the state breathlessly pursues deeper involvement in a dying steel industry, ramps up BEE programmes and invents — from scratch and far too late — a localisation policy for EV production, it is going to trip over itself and into an ever-deepening hole as we hand ever bigger swathes of local industry to imports.