Donald Trump has emerged victorious in the 2024 U.S. presidential election, securing 51% of the vote to defeat his Democratic opponent, Kamala Harris. The win marks Trump’s return to the presidency after a hard-fought campaign.
South African President Cyril Ramaphosa joined international leaders in congratulating Trump on his election victory. In a statement, Ramaphosa emphasized the importance of continuing the strong relationship between South Africa and the U.S., stating:
“I look forward to furthering the close and mutually beneficial partnership between our two nations across all sectors of cooperation. In the global context, we anticipate our leadership of the G20 in 2025, and we will work closely with the U.S. as they take over the G20 presidency in 2026.”
Implications of Trump’s Win for South Africa
Economists are weighing the potential impact of Trump’s victory on South Africa, noting that while there may be positive aspects, there are also risks. Frederick Mitchell, an economist with Aluma Capital, pointed out that the South African rand is highly sensitive to U.S. economic policies and market shifts. Changes in U.S. trade policy, particularly aggressive actions, could lead to a weakening of the rand, raising the cost of imports and contributing to inflation.
However, Mitchell also highlighted several potential benefits for South Africa under Trump’s administration:
- Positive Economic Growth Prospects: Trump’s presidency saw solid economic performance, including a 2.5% GDP growth in his last year in office. A return to similar pro-business policies could boost trade dynamics, benefiting South Africa and other emerging markets in the medium term.
- Investment Opportunities: Trump’s focus on deregulation and tax cuts could attract more U.S. investment into South Africa, helping to stimulate local industries and create jobs in a country facing high unemployment rates of over 34%.
- Continuation of Trade Agreements: The African Growth and Opportunity Act (AGOA), which has provided South Africa with duty-free access to U.S. markets, could be reinforced or expanded under Trump, strengthening economic ties between the two nations.
- Stability in Trade Policies: Trump’s strong stance on trade could lead to clearer, more predictable policies, giving South African exporters greater confidence to plan for the future.
However, there are also significant downsides to consider:
- Increased Protectionism and Tariffs: Trump’s protectionist approach may lead to higher tariffs on South African goods entering the U.S., potentially harming the country’s exports and putting pressure on its economy.
- Global Economic Instability: Mitchell warned that Trump’s unpredictable style could result in global economic volatility, including currency fluctuations. Aggressive trade policies might lead to a sharp depreciation of the rand, which could further fuel inflation and complicate the import situation for South Africa.
Conclusion
While there are opportunities for economic growth and stronger trade relationships under a second Trump administration, there are also risks, particularly related to protectionism and global market instability. The outcome for South Africa will largely depend on how Trump’s policies unfold and how the local economy adapts to these changes.
