Our recent Thought Leaders engagement focused on ‘The Trump Presidency: Local & Global Perspectives’. We were honoured to host Prof André Roux, Head of the Future Studies Programme at the University of Stellenbosch Business School, and Simon Freemantle, Senior Political Analyst at Standard Bank. Their insights and perspectives on this highly relevant topic made for a thought-provoking and engaging discussion.
Ryan Ravens, Accelerate Cape Town (ACT) CEO, shared that although making up only 6% of the world’s population, the US commands 30% of global economic output and half of global military power. As such, the impact of the Trump administration cannot be dismissed. He stressed that, for South African businesses and policymakers, it is increasingly important to understand and navigate this shifting geopolitical landscape.
Prof Roux provided an insightful overview of South Africa’s economic landscape, shaped by both internal challenges and external forces. The country has faced a series of global crises, all of which have been exacerbated by domestic issues such as corruption, inequality, and mass unemployment. These factors have weakened the economy – currently growing at approximately 1%, far below the 5% levels previously achieved.
This economic decline has been driven by persistent deficits; for example, South Africa consistently spends more than it produces and imports more than it exports. In addition, skills shortages and ongoing energy supply problems continue to hamper growth. The structure of the economy has also shifted, with mining and agriculture now contributing less to gross value added, while services account for over 70%. Furthermore, as an open economy, South Africa remains vulnerable to external factors.
Prof Roux also highlighted a major global shift that sees emerging markets playing a growing role in the world economy, replacing the long-standing dominance of Western countries with a similar shift across consumer patterns.
Regarding US trade policies under the Trump administration, he expressed concern over the potential impact of recent trade tariff announcements (potential trade war, increased policy uncertainty, weakened market sentiment, disrupted exchange rates and capital flows), all of which could cause broader financial instability. Demographic challenges, including a shrinking labour force, alongside the lingering cost-of-living crisis and reduced international development aid, add to the pressures. Prof Roux outlined scenarios ranging from moderate tariff increases that slow growth without crisis, to severe trade wars that could trigger a US and global recession.
In the case of South Africa, while China leads as South Africa’s largest trading partner, the US ranks second in exports and fourth in imports. It is also our country’s second-largest source of foreign exchange and third largest in direct investment, with a 50% share of portfolio investments. Therefore, whilst not completely dominant, the US does remain an important economic partner.
Looking forward, resilience depends on diversifying trade beyond the US, maximising opportunities through the African Continental Free Trade Agreement, attracting infrastructure investments, developing youth skills, and improving governance. Despite serious challenges, South Africa’s strong financial system, diversified economy, and youthful population provide a foundation for growth if the country adapts quickly, acts decisively, and plans strategically for multiple future scenarios.
Simon Freemantle continued the morning’s discussions sharing how, at the beginning of the year, two themes were central to our geopolitical and economic outlook: the durability of South Africa’s Government of National Unity (GNU), and the impact of a second Trump administration.
Simon also reiterated the impact of geopolitics on South Africa, whilst highlighting that the deterioration of the US-SA relationship is not only due to the Trump-era. American political consensus, across party lines, has viewed South Africa’s foreign policy as increasingly antagonistic for several years. He stressed that even if Trump leaves office, this bipartisan mistrust will remain.
However, Trump’s volatility adds another layer of unpredictability. Simon outlined some of the current issues:
- White genocide narrative – Disinformation around Afrikaner persecution has gained traction in US right-wing circles.
- Tariff escalation – A 10% baseline tariff is already in effect, with a potential 30% ‘Liberation Day’ tariff if progress isn’t shown.
- HIV/ AIDS and other programme withdrawals – Cuts to US foreign assistance are hitting research institutions, health programmes, and training partnerships.
- Social media attacks – Whilst lessened, it could resurface.
- Ambassadorial challenges – A right-wing US ambassador to South Africa could hamper constructive engagement.
- Other factors – Cancelled sub programmes, for e.g. the FBI prosecutorial training with our NPA.
However, Simon shared that, despite these challenges, there are signs of progress. Prior to the recent White House meeting, South Africa couldn’t even secure talks. Now, doors are open, and with that an opportunity to mitigate the tariff risk.
He stressed that South Africa must act strategically and pursue creative compromises, strengthen trade ties, utilise influential intermediaries and avoid being baited into reactive politics.
Simon also emphasised that, in today’s multipolar environment, it is crucial to recognise and leverage the presence of other regions and economies. Building on this, we need to strengthen our relationship with the US while also reassessing the global landscape and our own strategic strengths to seize new opportunities.
The morning concluded with an engaging discussion between our members and guest speakers, offering an opportunity to explore this topic in greater depth.
Once again, our sincere thanks to our speakers and members for their attendance and continued support, and to our sponsor, KPMG, for generously hosting the event.
