As President-elect Donald Trump prepares to take office with a bold new tariff agenda, South Africa faces uncertainty over its AGOA benefits and broader trade relations with the United States.
President-elect Donald Trump becomes the 47th President of the United States this month. He will be inaugurated on 20 January and has promised to put his new tariff regime into effect from “day one”. How will this affect South Africa?
His main targets are China, Mexico and Canada. South Africa might also be impacted, indirectly as a member of the BRICS group of countries, and directly because the US controls its benefits under the AGOA trade deal America has put in place for qualifying African countries.
AGOA expires and is due to be renewed in 2025 – whether the Trump administration will do so, with or without South Africa, remains to be seen.
South Africa’s continued benefits were brought into question recently because US legislators, both Democrat and Republican, believed the country was biased towards China, Russia, Iran and Hamas.
South Africa’s duty-free access to US markets was continued for this year in terms of an announcement last month by the Office of the US Trade Representative, according to a Bloomberg report in the Daily Investor.
The longer-term threat is a possible investigation into whether South Africa poses a risk to the national security interests of the United States. This is important because the eligibility criteria for AGOA benefits include a condition that the country must not “engage in activities that undermine the United States national security or foreign policy interests”.
Bloomberg reported that an amendment calling for a review of relations with South Africa was dropped from legislation signed by outgoing US President Joe Biden in December. South Africa will be hoping that the provision is not revived by the incoming Trump administration.
While the headlines are going to be about potential trade wars with China and Mexico, South African diplomats should be hard at work in Washington to secure continuing ties with the country’s second largest trading partner.
It’s going to be an interesting year.
Image by Gage Skidmore is licensed under CC BY 2.0
