The return of Donald Trump to the US presidency introduces both opportunities and uncertainties for South Africa’s AGOA (African Growth and Opportunity Act) benefits and global trade relations.
Amid widespread global media speculation, experts have approached the future of Africa with minimum alarm and even cautious optimism.
ChickenFacts investigates expert opinions on how Trump’s term in office is likely to impact South Africa’s access to AGOA, and how South Africa can mitigate potential pitfalls in an undoubtedly volatile political landscape ahead.
AGOA Risk Analysis
Christ Hattingh, Executive Director of the Centre for Risk Analysis (CRA) speculates that compared to bilateral trade agreements the U.S. engages in with other countries, AGOA is easier to renew and relatively simpler for countries to gain access to.
For renewal, unless a country actively implements policies that threaten its AGOA eligibility or engages in actions perceived by U.S. lawmakers as against U.S. interests, renewal is almost a certainty for many countries including South Africa.
Conversely, Hattingh added that over the past two years, both Republican and Democratic Congress members have conducted a comprehensive review of U.S.-South Africa bilateral relations, including AGOA and other areas of co-operation.
Concerns have arisen due to South Africa’s actions, such as not condemning Russia’s invasion of Ukraine, taking Israel to the International Court of Justice, and conducting military drills with China, Russia, and Iran. These actions have raised questions about South Africa’s neutrality and alignment.
However, the review still needs to pass through several barriers in the U.S. Congress, and its outcome depends on whether the new administration turns its attention towards more pressing domestic issues.
Bilateral Trade Risks and Opportunities
Chief Economist of the Agricultural Business Chamber of South Africa Wandile Sihlobo states that Trump’s history of protectionist trade policies and potential tariff hikes could have ripple effects on global agricultural markets–a concern for African economies dependent on export revenues.
During his first term, the U.S.-China trade war led to significant disruptions, with China redirecting agricultural imports to Brazil and Argentina.
Sihlobo said if Trump follows through on promises to impose steep tariffs on imports, particularly from China, retaliation could disrupt global grain and oilseed markets. Analysts caution that this could create volatility in commodity prices, indirectly affecting African farmers and exporters.
“South African farmers must monitor U.S. trade policies closely,” Sihlobo said. He added that while South Africa is a minor player in global grains, shifts in U.S. export dynamics could introduce competition in our traditional markets, especially in the Far East.
“We remain convinced that there is a minimal direct impact on South Africa. Whether the U.S. imposes any other import tariffs that could directly affect the South African farming community remains to be seen,” Sihlobo concluded.
Meanwhile, a recent article by The Star poses a different viewpoint from the dominating doom and gloom sentiment, in that some African leaders expect that Trump’s administration could bring their countries more profits from Africa’s wealth of natural resources.
Director of the Africa programme at the Carnegie Endowment for International Peace in Washington DC, Zainab Usman, stated that Trump is likely to loosen restrictions on the fossil fuel industry, creating opportunities for African oil and gas producers.
In agreement with this perspective, Chris Hattingh stated that the Trump administration may use inflammatory rhetoric without substantive actions, as taking strident measures could undermine U.S. interests and push South Africa closer to China and Russia.
Hattingh added that a transactional foreign policy focused on U.S. security, economic, and geopolitical issues is likely, and countries with stable, aligned governments that engage pragmatically with the U.S. will benefit from bilateral trade agreements.
Poultry
With the question of the potential impact on South African poultry imports, Chris Hatting alluded that the outcome remains to be seen. “We’ll need to see domestically what sort of pressures and requests farmers and others put on the U.S. administration. Do they want more protectionism? Do they favour certain markets over others in terms of imports to the U.S.?”
Hattingh added that this type of pressure could potentially lead to increased tariffs or the threat of them.
Furthermore, if Trump views the new BRICS alliance as a threat to U.S. trade and interests, he might threaten higher tariffs on products from countries like Brazil and South Africa. This uncertainty demands that companies stay updated on developments and adjust their supply chains and export targets accordingly.
Hattingh determined that South Africa needs to ensure its export markets are diversified and be aware of sector concentrations, such as poultry imports from Brazil. If the U.S. imposes new tariffs, South Africa must determine if it can mitigate the impact practically or if longer-term investments are needed.
The next two to four years are expected to be marked by increased volatility and uncertainty.
Risk Mitigation
Weighing in on risk mitigation for South Africa, Wandile Sihlobo stated that beyond the US, the global trade fragmentation further solidifies the view that South Africa must work to diversify its agricultural export markets. In a fragmented world like today, an export-oriented sector should spend more time and resources on broadening export markets and diversifying the risk.
“South Africa’s agriculture growth hinges on the country’s success in creating as many export markets as possible. In addition to retaining the existing export markets, BRICS remain one such avenue,” Sihlobo added.
Chris Hattingh has advocated that in terms of strategies to strengthen trade relations, there are many strong cards in South Africa’s deck to play.
In the past three years, South Africa has sought to regain its moral standing on the international stage by championing oppressed peoples and their issues, such as the court case with Israel.
However, Hattingh suggested that South Africa should adopt a more pragmatic, growth and investment-focused foreign policy and trade policy, using the right diplomatic channels for moral considerations.
When engaging with the U.S., South Africa should present a clear understanding of its strengths and challenges, confidently showcasing its well-developed sectors.
Highlighting the potential of leading the implementation of the Africa Continental Free Trade Area could benefit both South Africa and U.S. investments in the long term. Alignment among key departments like Department of International Relations and Cooperation (DIRCO), the Department of Trade, Industry and Competition (DTIC), and the presidency is crucial to avoid mixed signals that could harm South Africa’s interests.
Conclusion
As Trump prepares to assume office, African nations face the dual challenge of navigating his administration’s policies while addressing domestic economic priorities.
For South Africa and other African countries, the path forward lies in balancing engagement with major powers like the U.S. and China while building self-sufficiency. The stakes are high, with the continent’s economic future and global standing hanging in the balance.
While some African leaders see Trump’s return as a chance to advance their interests, others remain wary of the risks posed by his unorthodox style of governance. The continent’s response will determine whether it capitalises on emerging opportunities or bears the brunt of global uncertainties.
ChickenFacts will monitor all relevant developments as well as the impacts of policies on the poultry industry and consumers.
