MICHAEL AVERY: Trump aims tariffs cannon at SA as US recalibrates global role

This morning, as I dealt with day three without water, Donald Trump’s words, splashed across his digital platform, were as jarring as a gunshot fired in my quiet village of Parkview. 

The promised storm unleashed. In one fell swoop tariffs were imposed on nearly half of all US imports, a decision Bloomberg Economics warned would rip through supply chains and sow chaos in global markets.

Remember Covid-19? I could almost hear the grinding of gears, the rustle of disrupted commerce as the engine of international trade stuttered and slowed.

But that was not all the tempest. With the same fervour Trump turned his wrath towards SA, accusing us of “confiscating” land and treating “certain classes of people VERY BADLY”.

In his view, our long, painful journey towards redressing the wounds of apartheid had become a reckless grab, a modern-day appropriation that echoed the darkest days of Zimbabwe. Truth be dammed.

While there is some disagreement about the wording of the Expropriation Act about nil compensation, we are far from Zim-style land grabs, and Trump is clearly looking to punish the ANC for its alignment with Hamas, Iran and Russia.    

I recall a revealing tweet from outspoken US tech founder Arnaud Bertrand that has been resonating with many global observers. Bertrand argues that the US is dismantling its foreign interference apparatuses (read US Agency for International Development, or USAID, US President’s Emergency Plan For Aids Relief and others) and embracing a multipolar world. A world in which US secretary of state Marco Rubio told interviewer Megyn Kelly last week that “multigreat powers in different parts of the planet” now define the order.

In this new reality even tariffs on traditional allies such as Mexico, Canada and the EU make strategic sense. The message appears too obvious: the US is no longer content with its long-held position as the “indispensable nation”. It is rather choosing to recalibrate its role on its own terms, even if that means aggressive policies that look chaotic or disruptive. 

Trump’s vision for trade is taking the US back 100 years. But one key difference is that Trump wants to project tariffs as a “weapon of power” rather than protecting local economies, as was the aim of the Smoot-Hawley Act of 1930. 

By pulling out of USAID, dialling up tariffs and tearing up historical alliances, Trump is trying to project power to distract the world from the simple underlying truth. America is facing its own economic reckoning, running 7% fiscal deficits during boom times and labouring under a $36-trillion fiscal albatross around its neck.

If Adam Smith were alive now, he’d be horrified at what Western capitalism has become. The spirit of dynamic market innovation has been replaced by monopolies, bureaucratic sclerosis and an obsession with short-term profits. 

Meanwhile, China is playing to win. It leads the world in patents for AI, 5G and biotech. It’s building the Belt & Road Initiative, an enormous infrastructure network that will lock entire continents into its economic orbit. It is moving aggressively to control supply chains for the 21st century, for rare earth minerals, semiconductors and renewable energy sources. 

The West has gone from building the future to reacting to it. The great tech companies of Silicon Valley? They spend more time censoring content and lobbying for political protection than they do innovating. Europe? A continent of regulators, not creators. 

This is how hegemons die: not in flames, but in complacency. 

Trump’s tariffs and funding cuts, seen in isolation, appear dumb, as the Wall Street Journal recently framed it. Through the lens of an empire in decline, finally scrambling to confront the sclerosis that has infected large parts of the Western world head on is blunt and painful but slightly more understandable.

Bertrand’s tweet also sheds light on a broader strategic pivot. He suggests the US is not merely retreating from its imperial obligations; it is actively reshaping global relationships. The era of American hegemony may well be ending on its own terms.

This controlled withdrawal from extensive global commitments could be seen as a bid to focus on core national interests rather than being dragged into costly entanglements. It’s a messy, even chaotic, transition, but one that might stave off an even more disorderly collapse of the old order if left unaddressed for much longer. 

The ripple effects will extend far beyond American borders. In SA the ANC is finally figuring out that political expediency in pushing ahead with ruinous laws such as the National Health Insurance Act, and ideas to expropriate 3% of company profits to redistribute to black-only businesses come with real world consequences. Global capital is watching.

A decline in US demand, triggered by these tariffs, will undoubtedly dampen our export-driven sectors. With reduced foreign direct investment and a more volatile rand, the economic fallout could further stall our economic recovery. Already, local entrepreneurs and investors are bracing for a prolonged period of uncertainty. 

I’ve seen how quickly investor confidence can be eroded when policies are driven by short-term political theatrics rather than sound economic reasoning. And that erosion is happening before our very eyes.

Trump’s latest moves are an overt declaration that the old paradigms are crumbling, that American hegemony is receding, and that we are entering an era in which every nation must stand on its own or forge new alliances. 

We will hear and read a lot about the Smoot Hawley Act in the coming months. We have to ask whether this time truly is different.

• Avery, a financial journalist and broadcaster, produces BDTV’s ‘Business Watch’. Contact him at Badger@businesslive.co.za.