Why Trump’s political fight with South Africa might not hurt our trade - IOL

The US last week announced visa restrictions against certain South Africans, adding to already strained relations between Washington and Pretoria.

South Africa’s deteriorating relationship with the US is unlikely to see Washington shut the door on R260 billion worth of annual exports, with gold and platinum now making up more than half of what the country sells to the world’s largest economy.

Donald MacKay, founder and CEO of XA Global Trade Advisors, said the political fight between the two countries needed to be separated from their trade relationship.

“I don't think US President Donald Trump is going to cut off the US from importing our gold or platinum, for example, and that is now way more than half of what we send to the US,” MacKay said.

MacKay’s comments come after the US announced visa restrictions against certain South Africans last week, adding to already strained relations between Washington and Pretoria.

US ambassador Brent Bozell subsequently described the restrictions as “only the first step in a series of escalatory measures,” while South Africa has rejected Washington’s characterisation of its policies.

South Africa exported R260 billion worth of goods to the US last year – 3.3% of gross domestic product – a figure that was up from R238 billion in 2024, according to the Department of Trade, Industry and Competition.

More than 89% of those exports entered the US under ordinary Most Favoured Nation terms rather than preferential arrangements such as the African Growth and Opportunity Act.

“Trump has disrupted trade, and I don't think that's obviously good, but it also hasn't been devastating for South Africa,” MacKay said. US figures put total goods and services trade between the countries at $28.8 billion (R1.77 trillion) in 2025.

The US remains one of South Africa’s largest trading partners, although the relationship is heavily weighted towards South African exports.

The latest political dispute comes on top of trade tensions between the countries, including US tariffs on products such as vehicles, steel and aluminium and action under the Trade Act.

MacKay cautioned against assuming the latest political escalation would necessarily spill over into trade.

“We have no idea what this means at the moment, and I think we must be very, very careful to not give this this fire oxygen, which is what I think Trump wants at the moment. I'm not sure how much is actually here versus how much is simply hot air.”

The African Growth and Opportunity Act (AGOA) has long been one of the focal points of concern about deteriorating relations between the countries. AGOA, introduced in 2000, gives eligible African countries preferential access to the US market for qualifying products and has been extended to the end of 2028.

But MacKay said the value of the programme to South Africa’s overall trade relationship was much smaller than the attention it received.

“Everyone bangs on about AGOA, but before Liberation Day, the total cash value of AGOA, in other words, the amount of duty saved was R2 billion a year, which sounds like a lot for me and you, because we don't have R2 billion, but in the greater scheme of South African trade, where we are talking trillions of rands a year, this is literally a rounding error.”

Cars had been the biggest beneficiary of AGOA, with the programme removing the ordinary 2.5% US import duty on qualifying South African vehicles.

Trump’s Section 232 measures subsequently imposed an additional 25% tariff on automotive imports, substantially reducing the value of the AGOA preference. “And because it's a Section 232 duty, we now have 25% plus 2.5% and we get the 2.5% discounted,” MacKay said.

“So, it makes absolutely no difference. AGOA doesn't touch the vast majority of our trade, which is it does not attract duty because that is minerals and special shiny rocks like platinum, etc. So that is unaffected.”

“The only sector that really sees a benefit, which is not trivial, is the agricultural sector. So, they definitely are taking some pain, but the US is an important market and they certainly don't want to lose it. And AGOA has made a difference for them,” said MacKay.

MacKay added, “That is a relatively small part of our total trade to the US. So no, not too stressed about AGOA either”.