Vladimir Lenin famously said, “There are decades where nothing happens, and there are weeks where decades happen.” The year 2025 is proving to be such a year, not only for South Africa but for the entire world.
Donald Trump’s election as President of the world’s largest economy, the United States, has brought many long-simmering issues for South Africa and its relationship with the US to the forefront, as well as for the US and its relations with the broader global community.
If these issues, from geopolitical tensions to trade, are addressed strategically, they can help unlock badly needed economic growth for South Africa and reduce our staggeringly high unemployment and weak economic growth rates of 41.9% and 1%, respectively.
If handled recklessly, they can inflict unnecessary pain upon the working class and undermine South Africa’s hard-won sovereignty and transformation journey.
We are confident that, under the leadership of a government led by President Cyril Ramaphosa and the African National Congress, we can overcome these challenges, just as we have navigated difficult moments in our nation’s history – from the dark days of apartheid to the fraught transition to democracy and, more recently, managing a global pandemic, Covid-19.
The US is South Africa’s second-largest trading partner, absorbing 37% of our vehicle exports and large volumes of our agricultural products, as well as clothing, chemicals, jewellery, and other manufactured goods.
The announcement of a possible 30% tariff duty, including a 25% tariff on car exports and a 10% 90-day interim tariff on South African exports to the US, is not a matter to be taken lightly. No exporter can sustain such tariff hikes. Whilst we welcome the pause in tariff increases to a lower 10% rate, even this would make it nearly impossible for agricultural or car exports to remain competitive in the US market.
It should be borne in mind that these sectors are major sources of employment, with over one million jobs in agriculture and 300000 in motor manufacturing. With state revenue critical to funding frontline public services under severe pressure, we also cannot afford to lose the valuable taxes these sectors generate.
It is natural to despair in the midst of a crisis, especially given the plethora of noise – often destructive – on social media.
What is needed is for the government, working with Organised Labour and Business, to continue navigating these choppy waters calmly and strategically, guided by our national interests, particularly in protecting and creating decent jobs and safeguarding our sovereign choices.
It is clear that there is a need for engagements at the highest levels of government between South Africa and the US to address the various geopolitical tensions that have hindered relations between the two governments, many of which are not new but have been gathering over time. Whilst we may not be able to fully resolve all issues, we must find a stable path to manage them and the inevitable turbulence in any relationship. This has been done before on far more difficult issues, such as the second war in Iraq during former President George W. Bush’s term.
It is important to understand President Trump’s economic election manifesto, which, in essence, is about bringing investments and jobs to the US and addressing its trade deficits across the world. This is not dissimilar to what Cosatu has campaigned for over many years – a call to reindustrialise our economy.
Within the current trade relations, there is space to find a new trade agreement that will benefit workers in both America and South Africa, as well as the rest of the African continent. Yes, trade-offs will be needed, but they can be found in ways that do not threaten workers’ jobs, businesses, value chains, or industries.
Whilst recalibrating our relationship with the US in a mutually beneficial manner, we must simultaneously invest in and nurture our relationships with other major economies and trading partners, particularly China, the European Union, Japan, and India.
We must equally, irrespective of the current trade tensions, but driven by our need to create growth and jobs, aggressively seek new trade opportunities among emerging markets, from Brazil to Indonesia.
Particular attention must be paid to accelerating and ensuring the foundations for the African Continental Free Trade Area are laid, as that is our natural market, and a thriving Africa will reduce migration pressures on South Africa by millions desperate for work.
Domestic challenges
Equally, we must intensify efforts to resolve our domestic challenges. We are vulnerable precisely because our economy is sluggish and unemployment so high. Global turbulence is a fact of life, be it due to geopolitical tensions, climate change, or disease.
This means ensuring Eskom can provide reliable and affordable electricity, that Transnet is able to transport our goods and exports to their domestic and international markets, that infrastructure investments are done timeously and efficiently, that departments and local government provide the public and municipal services society and the economy depend upon, and that law enforcement has the resources needed to tackle crime and corruption.
It also necessitates a revamped industrial financing package, mobilising all available public and private financing to unlock SMMEs, export, and industrial sectors. As we negotiate on the tariff changes, it requires government and the private sector to provide surgical support for affected industries, particularly agriculture, motor, and other manufacturing sectors. We cannot afford to turn a blind eye and hope for the best when four out of ten South Africans cannot find jobs.
Whilst we navigate global turbulence and address our domestic challenges, we must drastically expand our public employment programmes to provide a path for the unemployed to earn at least the minimum wage whilst acquiring the skills and experience needed to find permanent, decent jobs or create their own SMMEs.
What is to be done is clear to all sober persons. What is needed is political will, discipline, and the urgency of now. Cosatu will continue to play its part alongside partners in government and business.
Cosatu President Zingiswa Losi
*** The views expressed here do not necessarily represent those of Independent Media or
BUSINESS REPORT
