US President Donald Trump’s tariffs two-step has thrown the world into turmoil, threatening livelihoods and raising new challenges for an international economy made complacent by the obvious though unequal benefits of globalisation.
With his comical tariffs board he announced — if anyone cared to hear it repeated — that “they’re doing very bad things in South Africa”, and whacked us with a 30% punitive tariff — later deferred — on top of the 10% on all nations.
By the end of the week, Trump had imposed a 145% tariff on China. Beijing replied with 125%, calling it a “numbers game ... turning itself into a joke”. In acting as he has, Trump joins a long list of US isolationist and populist leaders for whom tariffs historically served to excite popular opinion while roiling the world.
This time around, of course, the new elephant in the room is China. Its leader, Xi Jinping, has yet to make a call to Trump to suggest a deal. Unencumbered by the popular will, Xi knows China can endure whatever hardship Trump may impose. Not so South Africa. Like it or not, we’re going to have to make that call and offer our bag of goodies to ease his mood.
Ours will not be the routine type of call that the leaders of most other countries will make to beat the 90-day deadline before the big tariff whip comes out. No doubt the issues that have vaporised South Africa’s ties with the US under Trump — BEE and Starlink, our Israel genocide case, “farm murders’’ and the status (if that was ever questioned) of Afrikaners in our democracy — will be brought up again. And that’s before we even get to tariffs.
Also lurking on the horizon is the possible withdrawal of the US's African Growth and Opportunity Act (Agoa) benefits later this year, a potential threat to our automotive sector, arguably our strongest claim to an advanced manufacturing capacity. The government has indicated help may be afforded to that and other vital sectors. But more will be needed. President Cyril Ramaphosa and his team will have to convince Trump South Africa is open to US business.
Perhaps for too long we have relied on special deals, such as Agoa, and the limitless bounty of our minerals sector
While we may maintain an activist posture in the Global South, we are a constitutional democracy with a functioning multiparty system and a government representing some 60% of voters. To that we will need to add the promise of clean administration and transparent tender procedures, reliable infrastructure, electricity supply, logistics chains and a well-prepared workforce if we are to be more competitive, which is what the situation demands.
Advice on how to counter the Trump threat is usually along the lines of diversifying our trading partners while also making use of our strong ties with the EU and other regional trade blocs, including Africa.
A further step must be leveraging our supposedly strong relationships with our Brics partners, which so far have been a disappointment in purely trade terms. South Africa has run up a huge trade deficit with China, to which we export mostly mineral products while importing everything from fridges to laptops to cars and children's toys. Recently we have seen how trade platforms such as Shein and Temu threaten to further erode our struggling manufacturing sector, with barely a protest raised.
Perhaps for too long we have relied on special deals, such as Agoa, and the limitless bounty of our minerals sector. Inadvertently, Trump provides an opportunity to reset, and to ask hard questions about our economy in a global context. Having done so, we need to take the steps necessary to thrive in a protectionist world where true friends will be in short supply.
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