Wilma den Hartigh
9 November 9 2016
Some bad surprises might be in store for exporters of agricultural products from South Africa to the US if the president-elect of the United States, Donald Trump, makes good on campaign promises to implement more protectionist trade policies.
Paul Makube, agricultural economist at First National Bank, said the results of the US election was not good news for South Africa’s agricultural trade with that country, as Trump held protectionist trade views.
“In the longer term, future trade negotiations for exports will be much tougher. He will be doing business differently,” Makube said.
According to Makube, Trump was a suitable ally for the US’ agricultural industry, which was “naturally inclined” to be protectionist.
Mmatlou Kalaba, a trade economist at the Bureau for Food and Agricultural Policy at the University of Pretoria, told Farmer’s Weekly that a Trump presidency was a concern for South Africa, particularly in terms of the African Growth and Opportunity Act (AGOA).
In January this year, South Africa was at risk of losing its duty-free benefits for goods exported to the US, as per the AGOA agreement.
“It [AGOA] was already under pressure during the Obama administration, especially [the US’] demand for market access for meat products. What remains to be seen is whether the Trump administration will act on that rhetoric,” Kalaba said.
It was unlikely that Trump would repeal all trade deals in the next two years, Kalaba said, as certain trade treaties had been signed with international institutions and were therefore binding.
“I expect that some common sense will come in on some of the tough talk during the campaign. In the next few months, once he has settled in the White House, some issues will [become] clearer,” he said.
Earlier this year, in a Wall Street Journal article, Trump pledged that if he were elected, he would “withdraw the US from global trade alliances [and] exit the North American Free Trade Agreement if it isn’t renegotiated.”
In a Fin24 report, Tinashe Chuchu, a lecturer at Wits University’s School of Economic and Business Science, said a Trump administration could impose an extra 15% import tariff on South African products exported to the US.
This would raise tariffs to 35%, which would have a negative impact on South Africa’s economy.