{"id":816732,"date":"2025-03-13T13:00:00","date_gmt":"2025-03-13T11:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=816732"},"modified":"2025-03-13T12:37:36","modified_gmt":"2025-03-13T10:37:36","slug":"south-africa-plays-a-dangerous-game","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/816732\/south-africa-plays-a-dangerous-game\/","title":{"rendered":"South Africa plays a dangerous game"},"content":{"rendered":"\n

South Africa\u2019s deteriorating relationship with the United States can cost the economy billions and alienate one of its most important trading partners.<\/p>\n\n\n\n

Tensions between South Africa and the United States escalated after Donald Trump was inaugurated as President on 20 January 2025.<\/p>\n\n\n\n

Since then, Trump has suspended United States aid to South Africa over its race-based laws and the controversial Expropriation Act.<\/p>\n\n\n\n

Another problem for the United States is South Africa\u2019s close relationship with Iran, Russia, China, and Hamas.<\/p>\n\n\n\n

These countries are widely viewed as enemies of the United States, which raises questions about South Africa\u2019s claim of neutrality.<\/p>\n\n\n\n

South Africa’s case against Israel at the International Court of Justice has further entrenched the view that it is acting against the interests of the United States.<\/p>\n\n\n\n

Although the US aid suspension impacted South Africa, especially its cut in the President\u2019s Emergency Plan for AIDS Relief (PEPFAR) funding, this is only a taste of what can happen.<\/p>\n\n\n\n

Many experts warned that unless South Africa addresses the concerns of the Trump Administration, more significant action can be expected.<\/p>\n\n\n\n

These actions include losing African Growth and Opportunity Act (AGOA) benefits, tariffs on South African imports, and even sanctions.<\/p>\n\n\n\n

Despite these threats, President Cyril Ramaphosa doubled down on the rhetoric that caused tensions between South Africa and the United States.<\/p>\n\n\n\n

During his 2025 State of the Nation Address (SoNA), he said, \u201cWe will not be bullied. We will stand together as a united nation.\u201d<\/p>\n\n\n\n

On Tuesday, 25 February 2025, Ramaphosa and others published an article in Foreign Policy Magazine which attacked the United States, Israel, and the Trump Administration.<\/p>\n\n\n\n

His co-authors were Malaysia Prime Minister Anwar Ibrahim, Colombia President Gustavo Petro, and Hague Group Chair Varsha Gandikota-Nellutla.<\/p>\n\n\n\n

The article focused heavily on Israel\u2019s war in Gaza, calling it an assault against the Palestinian people, echoing dark chapters in their own countries\u2019 histories.<\/p>\n\n\n\n

Ramaphosa wrote that United States President Donald Trump\u2019s proposal to \u2018take over\u2019 Gaza strikes at the very foundations of international law.<\/p>\n\n\n\n

This article further increased tensions between South Africa and the United States and risks the trade relationship between countries.<\/p>\n\n\n\n

Trade and AGOA at risk<\/strong><\/h2>\n\n\n\n

It is essential to consider the trade relationship between the two countries to understand the dangerous game South Africa and President Ramaphosa are playing.<\/p>\n\n\n\n

According to the South African Revenue Service (SARS), the country exports goods worth R157 billion to the United States and imports products worth R120 billion.<\/p>\n\n\n\n

This translates into a trade surplus of R36 billion with the United States, which is extremely valuable to South Africa.<\/p>\n\n\n\n

Figures from the United States International Trade Commission differ from SARS\u2019s data but also show the great value South Africa gets from the United States.<\/p>\n\n\n\n

According to the AGOA information support portal, in 2023, South Africa exported $14 billion of goods to the USA. $3.6 billion of these exports were done under AGOA preference.<\/p>\n\n\n\n

Since 2000, South Africa has enjoyed $60.3 billion of trade exports to the USA, directly due to the AGOA program.<\/p>\n\n\n\n

The exports under AGOA account for roughly 1% of South Africa\u2019s total gross domestic product (GDP) of R7 trillion.<\/p>\n\n\n\n

According to the AGOA information portal, South Africa had a R125 billion total trade surplus with the United States.<\/p>\n\n\n\n

The total trade surplus with the United States accounts for roughly 2% of South Africa\u2019s total GDP. Conversely, the USA has a trade deficit with South Africa.<\/p>\n\n\n\n

In essence, South Africa gains great value from its trade with the United States, while the USA loses value from its trade with South Africa.<\/p>\n\n\n\n

Furthermore, the American economy is 73 times larger than the South African economy. Its trade with South Africa is negligible in economic terms.<\/p>\n\n\n\n

Simply put, the United States is far more important to South Africa than the other way around. However, Ramaphosa tried to downplay this reality.<\/p>\n\n\n\n

During the question-and-answer session in the National Assembly, Ramaphosa said the United States gained as much value from the AGOA agreement as South Africa.<\/p>\n\n\n\n

He added that he conveyed this message to Trump after he was elected as the 47th president of the United States.<\/p>\n\n\n\n

\u201cWe value participating in AGOA, but I also told President Trump that we sell critical minerals to the United States, and the relationship is fairly balanced,\u201d Ramaphosa said.<\/p>\n\n\n\n

The numbers do not support Ramaphosa\u2019s claims. The reality is that a trade war will cause tremendous damage to South Africa and not affect the United States much.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"

South Africa\u2019s deteriorating relationship with the United States can cost the economy billions and alienate one of its most important trading partners.<\/p>\n","protected":false},"author":10,"featured_media":815446,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[22012,18336,1293,10849,22011,20306],"class_list":["post-816732","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-african-growth-and-opportunity-act-agoa","tag-agoa","tag-cyril-ramaphosa","tag-donald-trump","tag-presidents-emergency-plan-for-aids-relief-pepfar","tag-state-of-the-nation-address-sona"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/816732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=816732"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/816732\/revisions"}],"predecessor-version":[{"id":816737,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/816732\/revisions\/816737"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/815446"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=816732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=816732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=816732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}