Republican presidential nominee and incoming U.S. President Donald Trump. Picture: Brian Snyder/REUTERS
Cape Town - In the wake of Donald Trump’s election victory, South Africa finds itself at a crossroads, grappling with the potential ramifications for its economy and geopolitical standing.
As the world watches closely, mixed reactions have emerged from various sectors within the country, reflecting a blend of optimism and apprehension.
Trump’s presidential election saw the rand losing up to 2.5% of its value, trading at R17.82 by midday yesterday.
Trump’s administration is poised to influence international trade dynamics, particularly through policies that may affect the Africa Growth and Opportunity Act (AGOA), which has been a cornerstone of South Africa’s trade relations with the US.
Economist at Stellenbosch Business School, Professor Andre Roux, said Trump’s victory is not all good news for Africa, South Africa, and for the developing world at large.
“We know that he is very strong on protecting his own economy, so we can expect a swathe of tariffs being instituted against imports. This is bound to have some negative impact, possibly on Agoa.
“I must also confess that Donald Trump is not particularly concerned about Africa. There are also some collateral damages and collateral benefits that might accrue. I’ve mentioned one already, the effect of growing protectionism in America. Relationships between China and America will probably be more troubled, and we know that China is, for better or for worse, a major trade partner of Africa.
“If he succeeds in somehow bringing about peace in the Middle East and peace in Russia, Ukraine, that, of course, could be good for the oil price, thinking long-term.
“But by and large, the markets will probably see his victory as positive, and America will be rediscovered as an investment destination, possibly at the expense of gold.”
Roux adds that Trump’s victory also brings into play the conversation about the rise of the BRICS grouping and the possibility of a BRICS currency.
“And there’s no doubt that he will try very hard to retain and perhaps even boost the significance of the US dollar as the world’s primary key currency,” Roux said.
Citadel global director, Bianca Botes, said initial market responses yesterday saw the rand weaken, and brought a day of volatility to the fore, influenced by uncertainty over potential shifts in US policies.
“The reaction, albeit volatile, does not reflect a ‘shock’ factor, and Trump trade has been priced in over the past few months. We are, however, entering a new era of uncertainty,” said Botes.
North-West University Business School economist, Professor Raymond Parsons, said among the more tangible immediate policy commitments by the Trump presidency are of a general US tariffs imposition of 20% on all imports and as much as 60% on Chinese imports.
“SA’s GNU must continue to prioritise implementing the right domestic policies needed to build SA’s economic resilience. The way to offset any adverse external trends is to ensure that SA’s economic house is in order, so as to achieve higher inclusive growth,” said Parsons.
Stellenbosch University’s School of Public Leadership Director, Professor Zwelinzima Ndevu, said Trump’s victory in the US presidential elections means South Africa will have to reflect on its role in geopolitics.
“I think this would impact our relationship with the US at the economic level because we are seen as allies of Russia and therefore are seen as anti-America.
“So that would have an impact, especially the Agoa and other related economic policies; it would also impact our relations. It could either be good or bad, as, unlike other leaders who are critical and analytical, Trump may take a different approach.
“Trump is not necessarily like that.
“If they are married, if the South Africans could clarify their stand, Trump is likely to warm up to them, even if ultimately there is no agreement. So it could be good, it could be bad, depending on how South Africa approaches it going forward,” Ndevu said.
Meanwhile, President Cyril Ramaphosa joined leaders around the world in congratulating the US President-elect on his return.
“I look forward to continuing the close and mutually beneficial partnership between our two nations across all domains of our cooperation.
“In the global arena, we look forward to our Presidency of the G20 in 2025, where we will work closely with the US who will succeed us in the G20 Presidency in 2026,” Ramaphosa said.
The office of Western Cape Premier Alan Winde, who fiercely advocated for South Africa to remain a beneficiary of Agoa, indicated yesterday that he is not commenting on the US election.
sibuliso.duba@inl.co.za
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