South Africa: While Global Trading Elephants, the U.S. and China, Butt Heads, How Should Small Countries Like SA Respond?

opinion

The US/China trade war creates a quandary not just for the two countries immediately involved but mimicking the US policy of closing its border is dangerous for a country like SA.

International trade, like every relationship, is complicated. We reduce it to a simple binary at our peril, but this happens with increasing frequency by the likes of Donald Trump, for example. On the face of it, a hard drive for local production seems like a goal worth pursuing, but as the soya farmers in the US will tell you, all is not as it seems when aggressive protectionism is the path chosen.

International trade is a two-way arrangement, which means if we decide to block imports, we also need to live with the consequence of increased difficultly in exporting our products to other countries. If you take this to its logical conclusion, we end up with companies never growing beyond the point of supplying our local market. In a country as large as the US or China, this is still possible (even if expensive and self-defeating), but in a country as small and poor as South Africa, it would be impossible to be self-sufficient.

However, it is abundantly clear...

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