The recent expulsion of SA’s ambassador to the US, the withdrawal of financial aid, and escalating hostility to Pretoria from Washington, reflect a larger shift in global geopolitics. As US President Donald Trump continues to reshape international relations through an aggressive, often erratic foreign policy, traditional alliances are fracturing and new economic corridors are opening.
For SA, this moment presents a challenge and an opportunity: to build a self-sustaining economy that is not beholden to the shifting tides of global politics, but is robust enough to withstand sudden fluctuations and external economic pressures. The goal should be economic sovereignty — ensuring that domestic industry, trade and financial systems are resilient, diversified and capable of long-term stability independent of any single global power.
Trump’s presidency has been marked by an aggressive trade policy and a willingness to discard long-standing alliances. His confrontational stance towards Nato allies, tariff war with China and transactional approach to foreign relations have rapidly reshaped the international economic landscape.
The US has increasingly isolated Pretoria, citing dissatisfaction with its stance on global issues such as China’s influence in Africa, SA’s growing alignment with Brics nations and, above all, SA’s support for Palestine.
This political manoeuvring has been compounded by ill-informed rhetoric in sections of the US media about SA, particularly the misleading narratives regarding the treatment of white South Africans. This type of discourse has reinforced policy hostility from the US while ignoring the reality of SA’s economic and political complexity.
SA’s trade relationship with the US has been beneficial at times. The African Growth & Opportunity Act (Agoa) facilitated $3.6bn in exports to the US in 2022 alone, particularly in automotive manufacturing, agriculture and raw materials. However, Agoa’s future remains uncertain under Trump’s leadership. His administration has shown hostility towards preferential trade agreements, raising concerns that SA could be cut out of the deal. The loss of Agoa benefits would significantly affect industries reliant on exports to the US, particularly in sectors where preferential tariffs make SA products competitive. Unionised jobs in the automotive sector could be hit hard. While Agoa has historically provided market access, the unpredictability means SA must diversify its trade portfolio and reduce dependency on US economic policies.
Meanwhile, the EU remains a critical economic partner. The bloc recently committed €4.7bn in investment to SA, focusing on renewable energy, digital transformation and manufacturing. As the EU seeks to mitigate supply chain risks and strengthen its partnerships amid rising geopolitical instability, SA is well positioned to leverage this investment for industrial growth and infrastructure development. With EU-SA trade totalling about €38bn in 2022, the European market remains one of SA’s most reliable and stable economic avenues.
India is also emerging as a key partner, with bilateral trade reaching $17bn during the 2021-22 period according to India’s ministry of commerce & industry. The country’s growing consumer base, projected to reach 600-million by 2030, presents significant opportunities for SA exports, particularly in the mining and manufacturing sectors.
The African Continental Free Trade Area (AfCFTA) represents the single largest economic integration effort in global history. Covering 1.3-billion people and a combined GDP of $3.4-trillion, it has the potential to boost intra-African trade by 52.3% by 2035. However, Africa remains heavily dependent on external trade, with intra-African commerce accounting for only 17% of total trade, compared with 68% in Europe and 59% in Asia. This overreliance on foreign markets leaves the continent vulnerable to external economic shocks and political decisions made in distant capitals.
Though AfCFTA has been in effect since 2021, SA has yet to fully leverage its potential. Structural barriers, inefficient trade policies and slow regulatory adjustments have prevented the country from taking full advantage of the agreement. SA’s reliance on traditional export markets outside the continent has led to missed opportunities in developing regional supply chains and expanding manufacturing exports within Africa. In addition, logistical constraints, such as inadequate transport infrastructure and complex customs procedures, continue to hinder seamless trade across African borders.
SA stands to gain significantly from stronger AfCFTA implementation. By eliminating tariffs on 90% of goods and reducing nontariff barriers, the agreement has the capacity to accelerate industrialisation, lower the cost of goods, and expand market access for African producers. The World Bank estimates that AfCFTA could lift 30-million Africans out of extreme poverty and increase the continent’s income by $450bn by 2035. This is particularly significant for SA, whose manufacturing sector has been declining. By aligning industrial policy with AfCFTA objectives, the country can reverse decades of deindustrialisation, create new employment opportunities and ensure its economy is not dictated by shifts in global geopolitics.
A stronger AfCFTA will also allow Africa to break the cycle of commodity dependence. Historically, African economies, including SA, have exported raw materials while importing manufactured goods at a premium. AfCFTA presents an opportunity to change this by fostering regional value chains where raw materials are processed and manufactured within the continent. If properly implemented, AfCFTA could expand Africa’s manufacturing output to $1.7-trillion by 2030, up from $500bn now, potentially creating up to 14-million jobs, according to the UN Industrial Development Organisation. SA, as one of the continent’s most industrialised nations, is well positioned to lead this shift, particularly in industries such as steel production, automotive manufacturing, pharmaceuticals and agro-processing.
MTN SA has developed strategic collaboration with China Telecom and Huawei to enhance its offerings in 5G technology, cloud computing, AI and business solutions. This partnership combines China Telecom’s expertise in network solutions, MTN’s extensive regional presence and Huawei’s technological advancements. The collaboration aims to drive the development of digital infrastructure across Africa, providing new business opportunities and improved technology for South Africans, particularly in the areas of the internet of things and industrial applications. Enhanced network services are also expected to benefit MTN’s business customers in sectors such as smart mining and industrial automation.
China’s Belt & Road Initiative (BRI) has played a pivotal role in reshaping Africa’s infrastructure landscape. In 2023 African nations received about $21.7bn in BRI-related investments, covering projects in ports, railways and renewable energy. SA has benefited from BRI-related infrastructure development, particularly in transport and logistics, with Chinese investment supporting upgrades to ports and rail networks. SA was the first African country to sign a BRI co-operation memorandum of understanding with China in 2015, and since then bilateral trade and investment have grown significantly. While the BRI offers opportunities for infrastructure expansion, SA must ensure such investments align with its long-term industrialisation strategy rather than contributing to unsustainable debt.
For AfCFTA and other trade agreements to truly benefit SA and the continent, the Ramaphosa administration must play a proactive role. The government should prioritise industrialisation through targeted investments in infrastructure, manufacturing capacity and skills development. This requires expanding local production capabilities instead of exporting raw materials, ensuring beneficiation policies in the mining sector, and incentivising businesses that operate within the regional trade framework. Additionally, regulatory frameworks must be reformed to facilitate intra-African trade, reducing bureaucratic red tape that now slows down cross-border commerce.
SA must take deliberate steps to define a new economic strategy — one that prioritises intra-African trade while also strengthening strategic engagement with global partners, including the EU, India, China, the Middle East, Latin America, and Brics. The Ramaphosa administration has a critical role to play in shaping this future, ensuring that SA moves beyond dependency on traditional Western markets and builds an economy rooted in regional integration, sustainable development and long-term resilience.
*Dr Jagarnath, a former deputy dean at Rhodes University and strategic adviser to the National Union of Metalworkers of SA, is director of NPO Friends of the Workers.
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