A week has passed since United States president Donald Trump has imposed his tariff on over ninety countries. South Africa was included. President Cyril Ramaphosa – nicknamed Squirrel by his critics – has vowed to charter a path of resilience for South Africa’s economy and businesses. President Ramaphosa stressed that this remained imperative in the turbulence plaguing the international trading system. In his weekly news letter Ramaphosa was responding to the US’ decision to impose 30 % tariffs on certain imports, stating that it highlights the urgent need for South Africa to adapt to shifting international trade conditions. This could prove to be a make-or-break situation for South Africa.
US President Donald Trump’s decision to impose higher tariffs on South Africa and other countries is to encourage US consumers to buy more American-made goods. However, Ramaphosa refused the claims. He said South Africa and the US’s trade relations have historically been complementary. “South African exports do not compete with US producers and do not pose a threat to US industry. It remains our aspiration that this should continue,” said the president. He also added that South African imports benefit US consumers in terms of both choice and cost. Despite the developments, Ramaphosa stressed that diplomatic channels with the US remain open. He added that the priority is protecting the country’s export industries.
“We will continue to engage the US in an attempt to preserve market access for our products. We must also accelerate the diversification of our export markets, particularly by deepening intra-African trade,” he said.
Ramaphosa has some tough battles ahead that he has to win. South Africa can’t remain isolated. The country must move to engage with its other trading partners to increase exports. Trump’s trade policies appear on the surface to conserve American business interests. However, beneath the surface regardless of the intensions behind the tariffs more harm than good will be done to the American economy. South Africa including the Johannesburg Stock Exchange (JSE) and the Ramaphosa administration should steer clear of Trump’s economic fiascos. Ramaphosa has to have patience would Trump until he is ready to come back to the negotiating table. When that will be no one can really say. The door should remain open but Pretoria needs to look elsewhere for more accepting markets.
The African Continental Free Trade Area (AfCFTA) affords unprecedented opportunities that South Africa as a signatory and leading nation must accelerate alongside its other partners on the continent. South Africa is strategically placed as the land of opportunity between Asia, Europe and Latin America.
Squirrel (Cyril Ramaphosa) can brag that “South Africa is also the biggest investor from the African Continent into the US, with 22 of our companies investing in a number of sectors including, mining, chemicals, pharmaceuticals and the food chain”. I can guarantee you that Trump doesn’t care about our 22 companies investing in the US. He can complain that “these measures will have a considerable impact on industries that rely heavily on exports to that country and on the workers they employ, as well as on our fiscus”. But neither our industries, nor their workers, and definitely not our fiscus, are matters of any concern to Donald Trump. His view is that America should quit subsidising the rest of the world, and that foreign interests likely conflict with American interests.
His policy is “America First”. That implies nationalism and protectionism, and means that foreign affairs matter only inasmuch as they threaten or can benefit the US.
Trump has clearly shut the gates on the very nations he should be partnering with. His agenda is nativism and isolation. He is uninterested in the detrimental effects his policies will have in the long term. Ramaphosa for his part should choose to remain patient and seek to trade with other more reasonable international bodies and powers. It must look to the Southern African Developmental Community (SADC), the African Union (AU) nations that are signatories within AfCFTA and also extend relations to BRICS with a weary hand. Patience and remaining firm in the face of adversity is what is required of the president right now. South Africa and even its neighbours have a long and winding road ahead of them to cross before they can accelerate integration.
The US is digging its own grave and the rest of the world including South Africa must form new alliances to strive ahead. New formations are being created on the international landscape and Pretoria must choose if they wish to be one of the pioneers.
Article written by:
Yacoob Cassim
Journalist at Radio Al Ansaar
