Pivot from US not easy as ABC for SA or Canada - TimesLIVE

While the US continues to antagonise South Africa, Canada and other strategic trade partners, even proponents of a pivot away from the US to mitigate exposure to trade fragmentation say it could prove economically and politically challenging.

Jen Hassum, executive director of the Broadbent Institute, told Business Times that Canadian Prime Minister Mark Carney is seeking trade, economic and political talks with countries around the world, and that Canada has historic ties with South Africa.

“That’s a very good starting point, and to look and evaluate what our industries are and what each of us has to offer each other, and frankly, there is a lot. [It is also important] to also do it on a fair footing.

“One would hope that it’s not just allowing Canadian companies to enter the South African market only to act like mini-Trumps, but for there to also be real respect and reciprocity between our nations, and I do believe that that is what is on the table at this moment in Canada.”

The Broadbent Institute is a Canadian progressive think tank dedicated to social democracy and economic equality. US President Donald Trump has expressed hostility towards Canada, entering a trade war with the partner and purporting to rename Lake Ontario “Lake America”.

In 2025, the Canadian government launched its first “Africa Global Strategy”, in which it said: “In a time of global economic and geopolitical uncertainty, Canada must seize opportunities to strengthen economic and national security, including by diversifying its markets; improving supply chain resilience; enhancing peace, security and human rights; and contributing to efforts that build and maintain corridors for critical goods, while promoting local benefits in Africa.”

At the same time, hostility towards South Africa has continued. The US last week announced visa restrictions on foreign nationals deemed complicit in “race-based uncompensated land seizures”, renewing tensions between Washington and Pretoria.

Hassum said $1.3-trillion worth of US goods cross the Canadian border annually, or $3.6bn daily. About 80% of Canadian exports cross the border, mostly produced by US or multinational companies. Under the US-Canada-Mexico trade network, a new vehicle may cross borders eight to 10 times before being completed.

“Part of the fallacy is the concept that you can just tariff to relocate these branch plants. A really good example of this is aluminium. That’s one of the sectors targeted for tariffs, even in Trump’s first term.

“But the idea that you can just get these aluminium plants to just relocate south of the border is a wild notion. They are strategically located in Canada near infrastructure for the generation of electricity that is cheap and green. And so, if the US wanted to open up brand new aluminium processing plants, it’s not just that you would simply need to finance the plant, you would need to have four Hoover Dams, just so that you can create a couple hundred aluminium jobs.”

Hassum said prior to the 51st state comments by Trump after his return to the White House, some Canadians admired him, but this shifted when they realised that his “strength” could be used against them.

Algoma Steel, based in Ontario, Canada, announced plans to retrench 1,000 employees at its steel plant just two months after receiving $500m in loan support from the Canadian government, stoking suspicion towards corporations among Canadian people.

“Mark Carney is looking to attract international investment into Canada, and the degree to which our financial system is different from before, there are more stark winners and losers. The people don’t necessarily gain when our public assets are sold.

“Sometimes it actually creates price increases in some of the services when our assets are sold. It would be good to think, through public policy around making sure that the cost of living in Canada is stable and does not further increase, that sudden inflationary spikes are mitigated and that there isn’t just a focus on exporting raw materials because that’s not the fulcrum of our economy.”

Wamkele Mene, secretary-general of the African Continental Free Trade Area (AfCFTA), told Business Times the potential of a partnership with Canada would depend on the structure, and African nations would avoid trade agreements with the rest of the world that are one-sided.

“I wouldn’t say a priori that there would be goods or services being dumped on the African market, because that would imply that, as Africans, we are not negotiating and don’t know what we want.

“The scenario is very similar to what happened with the economic partnership agreements with the EU. That is what we have to be very, very cautious of: a trade agreement that benefits only one party.”

While African heads of state have not yet discussed concrete trade agreements with Canada, there are compelling reasons for Africa to consider Canada closely as a strategic trade and investment partner.

“The uncertainty of Agoa [African Growth and Opportunity Act] is causing a great deal of damage to investors and to exporters and economic operators because of the uncertainties. If you look at what [the Kingdom of] Lesotho exports under Agoa to the US —about $180m worth of garments per year — that export market to the US is undermined by the uncertainty of Agoa. So if we were to find an alternative market that is as sophisticated as the US garment market, that would be the strategic thinking about a trade agreement with Canada.”

Africa will look for new opportunities in trading services, digital trade, critical minerals, and Canadian businesses and investments in productive capacity on the African continent to make the arrangement benefit both parties, Mene said.

Trade and Industrial Policy Strategies executive director Dr Saul Levin said South African trade with North America is overwhelmingly with the US. About 8% of South African exports go to North America, of which 94% is to the US.

“Canada currently does not even feature in our top 20 export markets. The products we export to the US are mainly minerals, fruit and autos, although there are many other products exported in smaller quantities that have been negatively impacted by the US tariffs.”

The products South Africa buys from the US include cars, medical products, machinery and aircraft parts.

“In the last quarter, South Africa shifted to the US for its diesel imports and bought R16bn of diesel, creating the trade deficit that the current US administration was seeking from its trading partners. Despite the negative political dynamics, the two countries continue trading with each other.”