US tariffs could hurt the South African economy, but Pretoria is already leveraging its energy transition to attract support from the EU and other partners.
South Africa is under fire from the new US administration, which has cancelled aid and expelled its ambassador from Washington. But Pretoria's instincts to engage across geopolitical divides mean that it could yet leverage the global energy transition to navigate a multipolar world to its advantage. Doing so will require it to align its political messaging with its economic diplomacy abroad and work with the private sector at home.
The Trump administration's hostility towards the South African government encompasses a mix of realpolitik, genuine concerns, factual revisionism, and deliberate misinterpretation that has put Pretoria on the back foot in its relations with one of its largest trading partners. Washington's core frustrations are with fundamental elements of South African policy that are unlikely to change - most notably its genocide case against Israel at the ICJ and its advocacy for global governance reform, including playing a central role in BRICS.
The Trump administration has also picked a fight with South Africa over its legislation on land reform and economic ownership transformation. Trump has offered to resettle white Afrikaner farmers in the US, who he claims are suffering racial discrimination, while Pretoria-born Elon Musk has repeatedly criticized the South African government and alleged it has 'openly racist ownership laws'. South Africa's President Cyril Ramaphosa has strongly rejected these allegations, describing them as a 'completely false narrative' and 'misinformation and distortions.'
The rift has also impacted South Africa's current presidency of the G20, with the US boycotting a meeting of G20 foreign ministers last month. The US has been frustrated by South Africa's use of international forums to exert its influence, and the new administration has particularly opposed Pretoria's advocacy of BRICS.
Pretoria's instincts to engage across geopolitical divides mean that it could yet leverage the global energy transition to navigate a multipolar world to its advantage.
Analysts in Johannesburg told me they now fear the US might seek to make an example of South Africa to demonstrate that American economic might cannot be replaced by BRICS partners. This has led to widespread concern amongst other African nations fearful of what a 'with us or against us' US approach to the continent might yield.
While Ramaphosa has stated that South Africa 'will not be bullied,' his government will be keen to mitigate the impact of the potential loss of tariff-free trade access to the US under the African Growth and Opportunity Act (AGOA), which is up for renewal this year, or increased US pressure on NGO funders to cut their support.
South Africa is reportedly preparing a bilateral trade deal to offer Trump that could offset some of the impact if the AGOA is not renewed.
Economic diplomacy and energy transition
Alongside seeking to mend relations with the US, Pretoria's response has been focused on enhancing its relationship with multiple actors including China, Canada, the EU, UK and others.
South Africa has a long history of non-alignment, rooted in the country's ideological and political history, that can provide a strong basis for maintaining complex foreign relations with a range of actors, in line with its progressive political rhetoric. The current crisis could be the force needed to galvanize political will and government ability towards implementing an economic-focused foreign policy that has often been lacking in the past.
Related content South Africa's G20 presidency is a chance for the West to engage with Global South priorities South Africa's multi-party unity government has recently come under significant strain over the delayed national budget, which has worried international investors. While coalition partners disagree on some key foreign policy issues, there is common ground on the need to promote the country's national economic interest through maintaining economic relationships with a broad range of international partners. Unlike many countries, South Africa has a codified National Interest Framework, derived from the constitution, which formally sets out the country's values.
These values were lauded by European Commission President Ursula von der Leyen during her participation at the EU-South Africa Summit on 13 March, where a package for €4.7 billion was committed to support South Africa's Just Energy Transition, infrastructure, and vaccine production.
The summit came after the US's withdrawal from the Just Energy Transition Partnership with South Africa, which the agreement's governing International Partner Group noted with regret. But with an influx of new funders including Canada, Spain, and Switzerland, the overall pledge stands at $12.8 billion, of which $2.5 billion has already been spent. South African concerns over the balance of debt to grants have been listened to, and the partner countries have increased their grant offer by 57 per cent since the initial pledge at COP26.
In addition, China has pledged support for energy transition and has exported nearly 8GW of solar panels in 2023 and 2024. In another deal, UK GuarantCo and British International Investment committed a $100million default guarantee to support renewable provider Etana.
These commitments to energy cooperation demonstrate the breadth of international support for South Africa, which could prove key in the face of US hostility.
This support for South Africa has been enabled by important reforms to national policy, including the lifting of restrictions on Independent Power Producers and structural changes to the energy sector. Accessing international finance to support the restructure of national energy utility ESKOM has necessitated a plan for new renewable generation to replace an aging coal fleet that will create significant opportunities for investors.
Domestic policies and coordination
For South Africa to continue to attract international support, it should present a unified national objective rooted in economic interests. This requires domestic political and bureaucratic coordination, including engaging with commercial actors.
In neighbouring Namibia, newly elected president Netumbo Nandi-Ndaitwah has streamlined her cabinet and strategically merged the ministry of international relations and cooperation with the ministry of trade. It is unlikely this will happen in South Africa due to the political compromises that underpin its coalition government, but Namibia's case does provide a good model of improved cross-ministry coordination to promote commercial interests abroad.
Foreign diplomats have privately expressed annoyance on the lack of coordination between ministries and the presidency, for example during the fallout of the 'Lady R' incident in 2022, when the US alleged that weapons were loaded onto a sanctioned Russian vessel in the South African port of Simonstown.
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Commitments to energy cooperation demonstrate the breadth of international support for South Africa, which could prove key in the face of US hostility.
The government should also further coordinate with the private sector and South African commercial representation overseas. It can apply the model of successful government-business coordination within the Presidency through Business for South Africa (B4SA) economic workstreams to the nation's economic diplomacy. Domestically, business resources and capacity have already been mobilized to work alongside and in support of government.
Managing relations with Washington
Given the importance of trade relations with the US, South Africa should also seek to manage its relations with Washington and try to ensure that individual actions or issues don't undermine its long-term policy of non-alignment.
It faces an important choice in who to nominate as South African Ambassador to Washington, following the expulsion of Ebrahim Rasool after he was quoted criticising the Trump administration. Speculative reports have suggested potential candidates with personal characteristics who might get more traction with Trump's inner circle, including several prominent white South African politicians, although Minister Ronald Lamola has emphasized that the ANC is a 'non-racial organisation' and would choose 'someone we believe is fit and proper.'
More broadly, changing global political, social and economic dynamics present both threats and strategic opportunities for South Africa. Very little unifies South Africans like the sense of shared resistance against international criticism and condemnation. Now is the time to mobilize that sentiment into a unified purpose to maximize the country's national economic interest.
