Is Donald Trump already tiring? In his first two weeks back in the White House he was everywhere — signing executive orders, rounding up immigrants, denouncing SA and offering Afrikaners refugee status in the US, laying out plans to occupy Gaza, shutting down whole agencies of the US government and picking a trade war with his close neighbours.
They call it flooding the zone — wherever you look there’s another Trump outrage occurring. He’s renamed the Gulf of Mexico, he’s going to shut down the US department of education.
But you sense it slowing down. The trade wars with Canada and Mexico were threatened but then delayed for a month. The purchase of Gaza isn’t going to happen because, he now says, there’s nothing to buy but a ruin. Instead of explaining why Elon Musk is burrowing into US treasury computers he calls Musk around to the Oval Office to explain it to journalists himself.
After his initial swipe at SA and his accusation that Afrikaner farmers were being swept off their land in the wake of a new Expropriation Act, he has gone relatively quiet. The threatened cut in aid, especially of local HIV/Aids programmes under Pepfar, has not materialised.
Perhaps there’s a dance required, a Mollification Move. In the cases of Mexico and Canada the leaders of both countries approached Trump at the last minute, promised actions they were undertaking anyway, and it was enough for him to claim a small victory. How Cyril Ramaphosa might manage that is not clear but he is right, so far, to stay quiet.
Ramaphosa needs the US to take SA chairing the G20 this year seriously if the year is not to be lost. You can’t change the world without its most powerful economy, and buying off Trump might turn out to be not all that expensive. When he gives you a fright he wants to see you jump, but stand up to him, one-on-one, in private, and this guy will always back away.
And he also faces economic problems of his own making. The US dollar is strengthening because markets expect inflation to return, and his inflammatory behaviour has much of the world seeking a safe haven — the dollar.
And the stronger the dollar the less impact Trump’s tariffs have on US trading partners such as SA. Provided you let your currency float, like the Reserve Bank wisely does here, your customers in the US pay less for the goods you export there, and if they’re paying you in dollars you also win.
Trump, even tired, isn’t done, so it would probably be wise, as budget day on February 19 approaches, for the Treasury to price in substantial changes in the terms of our trade with the world’s biggest economy.
So we might even find ourselves praying for dollar strength if Trump does start raising tariffs generally. He’ll soon begin to focus on product groups rather than exporting countries though, and that’s not without danger for SA.
Trump will have a blacklist of countries with whom the US runs a trade deficit. In SA’s case the deficit is one of the worst. On a weighted basis, the gap between the tariffs we impose on imports from the US against what they impose on our exports is just embarrassing.
Our trade surplus with the US is R36bn, and as Trump now turns his beady gaze on the general trade figures he is going to find rich pickings in steel and aluminium, automobiles, meat and food. We would feel the hit in all of those categories.
Trump, even tired, isn’t done, so it would probably be wise, as budget day on February 19 approaches, for the Treasury to price in substantial changes in the terms of our trade with the world’s biggest economy.
But all is not lost. Trump is unlikely to target SA systematically unless we continue to behave thoughtlessly in the Middle East. It is all very well going to the assistance of a people in trouble, but not so much if you don’t stop their suffering and your own people hurt as a result.
On Wednesday at least one member of the top ANC leadership attended a commemoration of the 46th anniversary of the Iranian clerical revolution at their embassy in Pretoria. Given the number of women the Iranians persecute for breaking religious laws you’d think a party such as the ANC would pause before committing such diplomatic outrages.
Iran is a real problem, a sponsor of terrorism, and yet we continue to offer it our friendship, as we did with Syria under the Assads. Why? It’s not as if a principle is at stake here. Iran is oil-rich, bigoted and violent. We should not be surprised or offended if countries judge us by our friends. We do that as individuals all the time.
We should tread carefully. The day the Russians invaded Ukraine in 2022 our minister of defence and the head of the army attended a champagne function at the Russian embassy in Pretoria. The whole world watched and remembered.
It’s one thing to tread carefully around a leader as capricious Trump, however tired he may or may not be. It’s entirely another to be too stupid to know or care that what you do is going to invite trouble.
• Bruce is a former editor of Business Day and the Financial Mail.
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