It is fortunate for South Africa that US President Donald Trump has the attention span of a goldfish. He was halfway done with shoving the US economy into recession — and the rest of us with it — when someone suggested to him that, perhaps, news that US Treasury bond yields were rising on Wednesday meant buyers were beginning to lose confidence in them.
Even Trump would get that message. US debt is $36.22-trillion (a trillion is a thousand billion, which is a thousand million), and even he knows a rising yield means bond investors are seeking a higher return because they think the risks of owning the bond are higher. And when bond yields rise, bond prices fall.
For future reference, it’s almost always bad news.
Even the remote prospect of an America unable to finance its debt, with Trump throwing around insane tariffs like confetti on all the world except Russia, and raising them again on pure whim if a tariffed country were to complain or retaliate, was enough to thoroughly scare investors.
There’s no way we could challenge Trump as the Chinese have or like Canada’s new Prime Minister Mark Carney has. We’re too small. We don’t have much to barter with
Bond market composure is normally the hardest to ruffle, but the fact is that global trust in the US government to manage its finances has been gravely, possibly irreparably, damaged by Trump. The Brics project to undermine the dominance of the dollar has been greatly enhanced.
Trump’s decision to call off the tariffs for 90 days caused free-falling US stock markets to rally, only to fall sharply again on Thursday, as the prospect of retaliation by China — the one country Trump has kept his tariff cannon aimed at — became real. Tariff wars have triggered shooting wars before, and with Trump putting 145% tariffs on the Chinese and Beijing doing the same to Washington, trade between the two biggest economies in the world effectively comes to a halt.
That means there are no means, other than military intervention, that Trump could use to dissuade China from invading Taiwan.
Trump is lazy and a bully, and he’d never take on someone who could hurt him back. And the US imports so many basic items from China — from umbrellas to smartphones — that it is in no position to replace them with locally-made substitutes. Americans are going to bleed as prices and inflation rise.
Come the US mid-term elections in November 2026, and the slim Republican majorities in Congress are in grave danger. That would at least neutralise Trump, but it’s a long time to go and this is a man who lives off drama and conflict, and who will almost certainly try to amend election laws to his favour before the mid-terms.
All of this is relevant to South Africa, and not just because we are a victim of Trump’s idiotic tariffs. On issues from land expropriation or the “persecution” of Afrikaners, Trump has swallowed all the most negative stories — some reasonably so and some not at all — and he has flung a string of threats at us. So we are involved in a way that, say Thailand, is not.
There’s no way we could challenge Trump as the Chinese have or like Canada’s new prime minister, Mark Carney, has. We’re too small. We don’t have much to barter with, not even minerals.
But we are chair for the rest of the year of the G20, which represents 75% of all goods traded in the world, and which started after the Asian financial crisis in the late 1990s. It means President Cyril Ramaphosa has the clout still to convene a special G20 summit in South Africa to talk about what is happening to the world and what might be done about it. He would obviously need to invite Trump as well, though he’d be turned down. But if he had the support of Carney and the French and the Chinese, Ramaphosa could get 19 of the world’s 20 biggest powers around a table just for a day.
Frankly, once Trump saw an opportunity to prance and show off in front of world leaders, he’d probably want to be here too. There’s a G20 summit planned for Johannesburg in November, but with the financial and political architecture of the world changing before our eyes, the G20 leaders need to convene soon to maintain the relevance of the group.
Making it happen is Ramaphosa’s call, and it doesn’t have to be in any way confrontational. At times like this, people in charge need to talk to each other. But if he is tempted, he needs to take care.
First, don’t bring these people to a wreck of a city like Johannesburg. They’re not blind. Take them to a luxury game reserve far away. Second, sort out the schism between the ANC and the DA over the budget. If you’re going to bring people here for serious talk, you need to show you’re serious about a stable government in your own back yard.
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