Major wake-up call for South Africa

Deputy President Paul Mashatile says that South Africa’s spat with the United States should be a wake-up call for the country to take care of itself and to find new trading partners.

South Africa has a very strained relationship with the United States after US president Donald Trump took aim at the country in recent months.

Trump and his advisors have deemed South Africa to be antagonistic towards US interests, focusing on its close ties to US enemies like Russia, Iran and China, and support of Hamas in the ongoing conflict in the Middle East.

The Whitehouse has also lashed out against what it says are anti-American policies like BEE ownership requirements for businesses and “human rights violations” like the land expropriation laws.

This has resulted in the United States pulling funding to South Africa while putting other trade agreements, like the African Growth and Opportunity Act (AGOA), under extreme doubt.

According to Mashatile, South Africa would like to work to repair its relationship with the United States, noting that it has enjoyed a long-standing partnership with the world’s biggest economy.

However, he described Trump’s actions as “regrettable”, particularly as far as the funding for the President’s Emergency Plan for AIDS Relief (PEPFAR) goes.

He said the sudden withdrawal of funding from Trump’s administration should serve as a “wake-up call” for South Africa to decrease its reliance on the United States.

“(We need) to develop sustainable healthcare solutions independent of external influences,” he said.

Mashatile added that the loss of AGOA benefits would also have a devastating effect on South Africa, particularly for farmers and agriculture workers.

AGOA supports South Africa’s agriculture and manufacturing sectors and is expected to generate around $21 billion in trade with the United States.

“Therefore, our position is that South Africa should maintain strong bilateral relations with the USA. Most importantly, as a country, we are committed to improving mutually beneficial trade, political, and diplomatic relations with the USA,” the deputy president said.

However, the situation again paints a worrying picture that cannot be ignored. Mashatile said that South Africa should “diversify” its export markets so that it is less reliant on “single trading partners”.

“We must, therefore, expand our trade relations with other countries, such as China, Russia, India, and European countries,” he said.

Europe to the rescue

South Africa has already taken its first big step in doing this, with the European Union announcing a EUR4.7 billion (~R93 billion) investment package at the EU-South Africa Summit this week.

European Commission President Ursula von der Leyen is in South Africa to strengthen relations between the two regions.

While Trump has taken specific aim at South Africa, he has also stunned the United States’ allies in Europe by backing Russia in the Ukraine war, and imposing tariffs on EU steel and aluminium, with more to follow.

Ties between South Africa and Europe have also been somewhat strained, given Pretoria’s refusal to outright condemn Russia in the Ukraine war, but the EU still sees potential in the country as a leader for justice.

Given the new and rising threat of Trump’s America, the EU is now looking to strengthen ties further.

“In a moment of increased confrontation and competition, we must strengthen our partnership further,” Von der Leyen said.

Most of the EU investment, around EUR4.4 billion, is intended for clean energy projects, such as harnessing the wind and the sun and through the production of clean hydrogen.

The package also focuses on connectivity infrastructure—both physical and digital—and on boosting the local pharmaceutical industry.

The investment will go a long way in covering the approximately $1 billion that was withdrawn from the United States pledge to support the Just Energy Transision.