Concerns grow in South Africa as Donald Trump threatens tariff hikes on Brics countries
South African president Cyril Ramaphosa has said he will seek direct talks with the new Trump administration to alleviate any possible threat that proposed tariff policies hold for the country’s exports.
It comes as South Africa assumes the chair of the next G-20 Summit, which will be held in the country in November 2025.
There is a mounting fear that South Africa’s participation in AGOA (African Growth and Opportunities Act) could be under threat.
Political observers have pointed out that hosting G-20 could give the country breathing space, with the new US administration potentially waiting until after the event to consider participation in AGOA and tariff changes.
“South Africa will have to use this period well to avoid putting billions of rands of South Africa’s exports at serious risk,” observers noted.
Fresh produce exporters are hoping that they can retain benefits under AGOA.
“The entire South African citrus export programme to the USA, as well as growth in stone fruit, grapes and other minor exports are at risk,” said fruit industry sources.
South Africa’s membership of Brics, which is seen as a new world order destined to counter the powers of the US and Western Nations, is constantly mentioned as a major obstacle for trade with the US.
Recently, South Africa’s action at the World Court in the Hague, against Israel’s actions in Gaza, has sparked much criticism in Washington.
Observers have suggested that there are several powerful lobbies in Washington working on action against South Africa.
President-elect Trump posted on social media on Saturday that his administration would punish those Brics member states who were trying to de-emphasise the US dollar as the world’s reserve currency.
“We require a commitment from these countries that they will neither create a new Brics currency, nor back any other currency to replace the mighty US dollar, or they will face 100 per cent tariffs and should expect to say goodbye to selling into the wonderful US economy,” Trump said.
This comes as the Brics+ bloc recently agreed to expand intra-trade using domestic currencies.
Media sources have said that while there have been hesitations about establishing a common Brics currency, the dialogue surrounding it garners attention amidst fears of economic reprisal from the US.
In recent years South Africa’s expanding fresh produce export industry has focused on the benefits it receives under AGOA, which essentially means tariff free trade.
“Tariffs of the magnitude that the new American president is threatening will destroy the existing fresh produce trade,” sources said. “It will also unsettle South Africa’s distribution of fruit to other markets and could lead to job losses all along the lines.”
