US-South Africa Bilateral Relations Review Act clears first hurdle
READ: 'It is a mockery' - ANC slams US move to sanction its officials
The bill gives President Donald Trump sweeping authority to impose sanctions on ANC leaders accused of backing America's rivals and acting against American interests.
US opinion on South Africa's foreign policy has been negative for some time
The Managing Partner of strategic consulting firm, Calabar Africa, Phillip van Niekerk and Hudson Institute Senior Fellow, Joshua Meservey discussed this with eNCA.
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Third, in response to these tariffs, most countries have simply capitulated. This strategy was first adopted by the UK in May and was, at least then, widely derided as pathetic. The reaction from most countries subsequently has broadly been to push for the lowest possible baseline tariff, throw in a few symbolic concessions, flatter Trump's ego with grandiose if meaningless deal announcements, and hope the playground bully moves on to his next target. While Canada and Mexico stood their ground earlier in his presidency, only China has posed a realistic and credible threat, with its rare earth export restrictions, which resulted in the US caving. Australia barely even bothered to respond to its tariffs and opted for benign resignation, absorbing the hit of a 10% duty on exports without debate. After last weekend, the EU has perhaps emerged as the most humiliated, particularly when one considers that the vast size of the common market should have made it the one economic actor (along with China) which could have extracted relatively favourable terms. While the EU managed to avoid the previously threatened 30% tariffs in favour of a more modest 15%, inconsistent messaging and a failure to hit back with its long-prepared anti-coercion tool, commonly referred to as the 'bazooka', revealed a lack of coordination and resolve which is sadly all too typical of the bloc. EU Commission president Ursula von der Leyen, who has previously handled trade policy in a relatively competent way, has been openly criticised across the EU. French Prime Minister Francois Bayrou said that the bloc had 'resigned itself into submission'. Karl Falkenberg, previously deputy director-general of the European Commission's trade directorate, remarked that the deal was further proof that the EU is 'an economic giant and a political dwarf'. Perhaps the best thing that can be said about the deal is that given how much Trump loathes the EU, it could have been worse. South Africa, it must be said, has looked equally spineless. Other than the feeble attempt at sycophancy in the Oval Office, Cyril Ramapahosa and Parks Tau have just rolled over. From this week, barring any last-minute changes, an additional 30% tariff will apply on South African exports to the US. This will, almost certainly, have major impacts on key sectors for employment such as citrus and auto manufacturing. But the fourth point is that, counterintuitively, the economic effects of these tariffs have been, at least until now, overestimated. At the start of the year the consensus among CEOs, investors and economists was clear; if Trump followed through with his threats to raise tariffs, the US dollar would strengthen and stagflation would result. Analysts projected that every 1% increase in duties would cut US GDP by 0.1% and raise inflation by roughly the same amount. But with the US economy continuing to tick along, and with job creation still relatively healthy, the economic reality has defied the Cassandras. Some argue this is because Trump's threats have been mostly theatrical. But the effective US tariff rate has already jumped from 2.5% to 15% and is only likely to increase following 1 August. Tariff revenues this year are forecasted to be a remarkable R5.4-trillion ($300-billion), according to Treasury estimates, or four times what they were last year. Meanwhile, the US dollar has had the lousiest start to a year for decades, posting its worst first-half performance since the 1970s. Equally surprising is the lack of the expected inflationary surge. Is the US somehow enjoying a 'free lunch', collecting substantially higher tariff revenue without any economic pain? Some data suggests that foreign exporters are absorbing about 20% of the cost of tariffs, which is a bigger share than in Trump's first term, but which still leaves 80% to be paid by US companies and consumers. In this sense the pain is being felt, but at least until now, it has been too diffused to be immediately noticed. This rose-tinged assessment, however, could be premature. Evidence of price increases are starting to appear in some consumer goods like household appliances, sports equipment and toys. Whether inflation spreads further, especially following the 1 August watershed, is perhaps the single most important economic variable for the remainder of 2025 and going into 2026. The last point is the most obvious – this is not going to end anytime soon. America's trade war is not a phase. It is a feature, perhaps the central feature, of Trump's second presidency. The point is not to reach a final settlement or achieve a new, stable system. The point is the perpetual uncertainty, the constant leverage, the unending brinkmanship.
