Nicholas Woode-Smith: How can SA survive and even profit from Trump?

Key points.US tariffs risk damaging demand for South African commodities.South Africa must prioritize US trade to maintain AGOA benefits.Resetting foreign policy could modernize SA's economy and create jobs..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here..If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Nicholas Woode-Smith*.Donald Trump's ascension to the United States presidency is once again making waves globally. As it stands, Trump's outwardly isolationist and protectionist policies are already threatening to damage South Africa's economy. Not only will a rise in import tariffs damage the demand for South African commodities in the US, but due to the South African government's behaviour over the last few years, Washington may seek harsher measures to pull South Africa back into line..But Trump's presidency doesn't have to be a disaster for South Africa. It could be an opportunity for the country to improve its global standing and escape the worst of Trump's anti-trade policies..The US cannot produce enough of everything that it needs and will need to maintain trade relations with key partners. South Africa is a premier producer of gold and platinum, among many other precious commodities; if the government plays its cards right, we could maintain our exports to the US and perhaps even improve our standing..Trump's main target for his trade war is China. And while China is South Africa's largest trade partner, it is an incredibly one-sided relationship. China invests very little in this country, and our trade deficit continues to balloon. As the US pulls away from China, its demand for many goods will be left unfulfilled. With the right market-friendly reforms, the South African economy could become equipped to fulfil much of this demand. This will bring in many more jobs and will further modernise our economy..But for the US to want to maintain relations with South Africa, there needs to be changes. For years now the government has maintained an anti-Western bias – often siding with dictators and enemies of the US in exchange for bribes and ideological brownie points..This needs to stop. There is no positive future for the South African economy without trade with the US. That means that we can't jeopardise AGOA (Africa Growth and Opportunity Act), which gives us preferential trade with the US to the amount of $3 billion in 2022 alone..Without this preferential trade agreement, we will suffer. Jobs will be lost. And much needed wealth will diminish for the country..But with Republican domination in the US, AGOA's future is uncertain. SA's positive relationship with Russia, China and Iran has lined it up as an enemy of the US. Its positive relations and support of terrorist groups like Hamas and Hezbollah have also gone a long way to paint SA as an enemy of not just the US, but democratic society as a whole..Read more: Trump's bold plans: Kevin Lings explains the global ripple effects for South Africa.The government needs to use the Trump presidency as an opportunity to reset its foreign policy. Foreign minister Ronald Lamola has stated that he wants to prioritise economic diplomacy and strengthening bilateral trade with the country's largest trade partners – the US, Europe and China..But as China's trade relationship with South Africa is exploitative in nature, I'd urge Minister Lamola and the DIRCO (Department of International Relations and Co-operation) to not prioritise Chinese trade; especially as our closeness to China may alienate our more profitable trade partner in the United States..Preferential trade should be given to the US, Europe, UK, African and other Commonwealth countries ahead of China. Not only will this aid in amending the trade deficit, but it will also send a strong message to Washington that we value their trade more than China's. This may help maintain AGOA and American trade..On top of that, South Africa needs to leave BRICS. The nonsensical trade alliance has shifted into an arbitrary anti-American group, and it holds no practical benefit for us. Russia, China, India and Iran will inevitably use the club to try leverage dominance over the smaller members. And we're a smaller member..Washington will favour us if we leave the clutches of BRICS and reinforce Western trade. We should also pursue stronger trade ties with the United Kingdom and Europe, as well as emerging markets like Brazil and India, which should also be leaving BRICS..South Africa could use the Trump administration to make positive changes in our foreign, trade and industrial policy. We only need to make the right and mature decision, and the South African people will prosper from it..Read also:.BN Briefing: Trump's inauguration sparks global speculation on trade, tech, and market reforms🔒 The Economist: Trump's X-Factor secures Gaza ceasefire after 15 months of HellBizNews Briefing – Cancer warrior Oscar Chalupsky; Retail stocks in focus; Trump's tariff threats.*Nicholas Woode-Smith is an economic historian, political analyst and author of over twenty books. He is a Senior Associate of the Free Market Foundation and writes in his personal capacity.

Nicholas Woode-Smith: How can SA survive and even profit from Trump?

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