Trade colonialism? How US tariffs are reshaping South Africa's economic future

As global trade dynamics continue to shift, the impact of US tariffs from the Trump administration remains a critical topic worldwide. President Trump implemented a series of sweeping global tariffs on various goods, claiming they were necessary to protect American industries. 

While these tariffs primarily target the European Union, South America, African and Asian countries, South Africa has also felt the repercussions, facing a staggering 32% tariff on its exports which is expected  to disrupt the economy.

The South African economy, heavily reliant on exports, now navigates a trade landscape increasingly dominated by US interests, posing significant challenges for local industries. 

Political analyst Dr Sandile Swana provides a sobering perspective on the implications of these policies and warned that Trump would not change his tariff policy.

He argued that the Trump administration's approach fundamentally alters the nature of international trade relationships. 

"All those who want to align themselves with 'Make America Great Again' will not be equals of the United States. To be in the inner circle of the US trade system, you must act as a satellite state, effectively a colony, and pay certain fees to be allowed to trade."

This rhetoric is echoed by a growing sentiment among South African policymakers and economists who fear that the country’s current trade relationship with the US places it at a disadvantage.

Swana pointed out that, despite historical ties, South Africa's bargaining power is alarmingly limited.

“We have nothing to bargain with when we talk to the United States. We cannot say, 'Give us this, and we will give you that.' It’s a question of surrendering to the United States."

The implications of this dynamic extend beyond economics. 

Swana emphasised the urgent need for South Africa to diversify its trading partners. 

"There are 1.4 billion people on the African continent. We need to ask ourselves what we can do to trade with those people in Asia, South America, and Europe.

"The US is a market for everybody, but we must also develop our local economies and technologies."

He argued that while the US provides a vast consumer market, it also wields military power to protect its trade interests.

"America’s military presence globally ensures that trade routes are secured and disputes are settled in their favour. This reality places countries like South Africa in a precarious position as they navigate their economic strategies while facing pressure from a dominant superpower."

Advocating for a shift in focus towards internal development and regional cooperation, Swana argued that South Africa should empower its people and create trade networks that do not solely rely on Western models. 

“We have the potential to innovate and produce technologies that meet the needs of our local and regional markets."

The urgency of this conversation was echoed during a recent webinar hosted by the South African Institute of International Affairs (SAIIA), where economist Dr Nandi Mthembu emphasised the potential impact of US tariffs on local industries dependent on imports. 

"Our manufacturing sector, particularly in textiles and agriculture, could face increased costs, which may ultimately lead to higher prices for consumers," she stated, advocating for government intervention to support affected businesses.

At a conference in Nairobi, Kenya, organised by the African Economic Research Consortium (AERC) on Monday, regional analyst Amina Mwangi warned that US tariffs could exacerbate existing trade imbalances within Africa. 

"Many African nations rely heavily on imports from the global market. Increased tariffs could stifle intra-African trade initiatives that have gained momentum under the African Continental Free Trade Area (AfCFTA)," she said.

thabo.makwakwa@inl.co.za

IOL POLITICS