An economist and trade expert has warned against complacency in the relationship between Africa, including South Africa, and the US under the Trump administration. Donald Trump is certainly a concern for South African trade, says Eckart Naumann of the Trade Law Centre (tralac). “The tension with China may ironically be one of the key reasons why Africa has escaped Trump’s bluster. It is well known that China is well integrated with Africa and continues to make inroads,” he says. It is no secret that the US does not want to fall behind – as evidenced by the Prosper Africa initiative and new trade finance institutions that have been launched to help companies to do business with Africa. Many consider the programme a response to the needs on the ground and the strategy employed by China. “Trump has introduced punitive tariffs on steel and aluminium imports which have affected South Africa. Despite our low levels of US exports, we did not escape the sanction,” says Naumann. “Automotives may be next and Trump has postponed action on this until later this year. So there may well be another nasty surprise which could all but kill our auto exports to the US.” It is the less predictable nature of the Trump administration that is the most concerning, says Naumann, along with the scant regard for the impact on affected parties and arguably also the bigger picture. “Having said that, I do sense that Trump is interested in utilising the benefits and opportunities of engagement (trade and investment) with Africa; perhaps this focus is more on cherry-picked countries and opportunities rather than a sense that tariff preferences are a way of encouraging greater long-term development across Africa.” There is no denying, says Naumann, that Trump is changing the rules of the trade game. “His administration is actively undermining the rulesbased world trading system through words and deeds. It is clear that Trump does not believe in the benefits of trade – at least not in a global “free” sense (any country that has a trade surplus with the US is considered “unfair” and taking “away” from the US), and prefers national value chains over globally integrated value chains. The impact of this will be felt for years, if not decades to come.” While South Africa, for the most part, has gone unnoticed, says Naumann, the greatest challenge to the country is the unpredictable nature of Trump’s actions. – Liesl Venter
There is no denying that Trump is changing the rules of the trade game. – Eckart Naumann
