While the United States of America (US) is one of South Africa’s bigger trade partners and donors, SA won’t exactly collapse overnight without its support.
According to reports, in 2023, the US provided around $800 million (about R15 billion) in aid, mainly for healthcare (HIV/AIDS programs), education, and economic development.
But aside from this, the US doesn’t exactly ‘fund’ SA in any other way.
The US is, however, a major buyer of South African products like minerals, wine, and fruit.
US BUYS SA’S MINERALS
The United States imports several key minerals from South Africa. Some of the most significant minerals include:
Platinum Group Metals (PGMs): South Africa is the world’s largest producer of platinum and also produces palladium, rhodium, and other PGMs. These metals are used in automotive catalysts, electronics, and jewellery.
Gold: We have historically been one of the world’s largest producers of gold, although its production has declined in recent years. Gold is a major financial asset.
Chromium: We are a leading producer of chromium, which is the US uses in stainless steel production and other alloys.
Manganese: South Africa is a major producer of manganese, which is essential for steel production and battery manufacturing.
Vanadium: We are a significant producer of vanadium, which the US uses in steel alloys and increasingly in energy storage systems.
Diamonds: South Africa is a big producer of diamonds, which are used in jewellery and industrial applications.
US TRADE CONTRIBUTES AROUND 6% OF SA’s OVERALL GDP
According to the Office of the United States Trade Representative, in 2022, the total trade between South Africa and the United States amounted R292 billion in imports from South Africa. (Conversion based on an estimated exchange rate of R18/$1.)
To understand the significance of this trade in relation to South Africa’s economy, it’s helpful to consider the country’s Gross Domestic Product (GDP).
In 2021, South Africa’s GDP was approximately R7.5 trillion. While the exact GDP for 2022 isn’t specified in the provided sources, if we assume a similar GDP for 2022, trade with the US would represent about 6% of South Africa’s GDP. (Conversion based on an estimated exchange rate of R18/$1.)
WHAT HAPPENS IF TRUMP CUTS FUNDING?
This particular funding Trump has threatened SA with won’t exactly have a direct impact on SA’s GDP. But…
Healthcare will take a knock – A lot of US aid goes into HIV/AIDS programs (like PEPFAR), which help millions of South Africans get treatment. If this funding is pulled, it could affect clinics, medicine supplies, and support programs.
And most especially…
TRADE BETWEEN SA AND US COULD SUFFER
If political relations sour, tariffs or trade restrictions could follow. This means fewer exports, job losses, and less money coming into the country.
Also, the rand could fall further.
After Trump’s latest comments, the rand weakened to R19 to the dollar. If the US takes further action, the rand could drop more, making imports (like fuel and electronics) even more expensive.
FOREIGN INVESTMENT MIGHT SLOW DOWN
The U.S. is a major investor in South Africa. If Trump convinces U.S. companies to pull back investments, businesses could struggle, leading to slower economic growth and fewer job opportunities.
CAN SA SURVIVE WITHOUT U.S. SUPPORT?
Economists have advised that losing US support will add to existing economic struggles. The government may look to China, Russia, and BRICS partners for alternative funding and trade deals, but these don’t always come with the same benefits as U.S. partnerships.
THE BOTTOM LINE
While South Africa wants to push ahead with land reform, it needs to be strategic. Provoking Trump could have serious economic consequences, affecting everything from healthcare to jobs.
DO YOU THINK SOUTH AFRICA SHOULD REALLY TAKE INTO CONSIDERED HOW TRUMP FEELS OR SHOULD THE COUNTRY JUST DO WHAT IS RIGHT FOR ITS OWN PEOPLE IN THE SAME WAY TRUMP HAS BEEN DOING FOR THE AMERICANS?
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1.
Subscribe to The South African website’s newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
