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SA at a crossroads as US-China trade war creates opportunity for increased exports

Bhaso Ndzendze
By Bhaso Ndzendze
2 Sep 2024
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This week’s Forum on China-Africa Cooperation (Focac) takes place against the backdrop of the US-China trade war, which although initiated by Donald Trump is likely to continue if Kamala Harris wins the presidency.

President Cyril Ramaphosa, like other heads of state and government in Africa, heads to China this week for the Forum on China-Africa Cooperation (Focac), from 3 to 6 September.

It has become something of a cliché that when the forum convenes in Beijing, Africa is left virtually without any presidents. Indeed, more African leaders attend the meeting with Beijing, which takes place every three years, than they do the United Nations General Assembly. As has become the norm, they will all profess friendship with China.

This year’s gathering takes place under the wordy theme, “Joining Hands to Advance Modernisation and Build a High-Level China-Africa Community with a Shared Future”.

The meeting takes place against the backdrop of the US-China trade war that was initiated by former US president Donald Trump in 2018, and which has presented a scenario in which the interests of China and Africa, particularly South Africa, are at odds with one another.

Trump’s motives


Then President Trump’s motives were three-fold: bringing manufacturing jobs back to America, preventing the emergence of peer competition in global leadership, and ensuring US national security.

His moves went against the conventional wisdom of the post-Cold War consensus and were hotly debated across the American political spectrum. Yet, Trump pursued them with consistency, as they formed the policy manifestation of his “America First” ideology.

His favoured instrument was tariffs, and his preferred target was China. In his 2016 campaign, for instance, he promised a 40% tariff on China. The East Asian giant met all three criteria for the imposition of tariffs.

It is worth noting that since the 1980s, China’s manufacturing base has grown at America’s expense. Beijing emerged as the leading competitor for world leader through trade ties, and China’s reverse-engineering of US technologies as well as its territorial and maritime disputes with American allies Japan and Taiwan, meant Beijing was one of the most salient threats to US national security.

Once in office, it took just over a year before Trump implemented his campaign promises. Beginning in March of 2018, the White House announced a 25% tariff on steel imports and 10% on aluminium from all countries, not singling China out. This led to a 25% retaliatory tariff by Beijing on US soybeans and aeroplanes.

By 2020, US tariffs on Chinese goods were at an average of 19.3% (from 3.1% in early 2018) and affected about 66% of China’s total exports. In turn, China’s own tariffs on US products were at 21.1% and affected nearly 60% of US exports.

In 2019, the two countries also ratcheted up their mutually restrictive measures by announcing outright bans. While America targeted China’s information technology companies, particularly Huawei and ZTE, China targeted American agricultural produce – in part because that is America’s main export to China, but also in part because farming states were among the Republican party’s key electoral constituencies.

Trade war


Trump’s trade war moves were interpreted as being anathema to the letter and spirit of open international trade. Yet the trade war has had its beneficiaries, and a look at the data shows that South Africa is among them.

Particularly in agricultural exports to China, where China’s more than one billion population suddenly needed to find alternative sources after the ban on the US, the data shows that South Africa’s exports to China moved from R1.4-billion in 2017 (the last year before the trade war) to R2.97-billion in 2018 and has since grown to R7.2-billion in 2023 for fruits and nuts.

Indeed, South Africa’s exports of these products to China have grown without interruption. China’s import of meat products from South Africa has not been as successful or consistent, however. Although the figure did jump from R57-million to R355-million between 2017 and 2018 (the first year of the trade war), and then to a peak of R698-million in 2020, it has since been climbing down and was at R32.5-million as of 2023.

This is in part due to other exporters – noticeably fellow BRICS member Brazil – outcompeting South Africa for access to the Chinese market and filling the space left by the US.

These gains have not been universal. South Africa is an agricultural exception and a global leader in the sector. Indeed, a concerning trend which has popped up is the growth of American fruit and nut exports to other African countries as the heavily subsidised US producers look to divert their produce to alternative markets.

However, South Africa seems to have been immune to this pattern. South Africa’s imports of these products from the US remain largely unchanged since before the trade war.

South Africa is thus at a crossroads. Despite the rhetoric of friendship, Pretoria and Beijing’s best interests are sometimes at odds with one another. South Africa should make the most of this, not shy away from it. Like the two main rivals, South Africa should put itself first.

Even higher tariffs


As the two presidential hopefuls vie for the White House, it is likely that no matter who emerges victorious, the trade war will continue. Trump has announced plans for even higher tariffs should he win.

Yet while the Democrats have criticised these moves as a “tax on the middle class”, the Biden administration has retained and expanded the tariffs and has introduced a new law to sever tech giant ByteDance/TikTok’s ties to its Chinese owners for reasons first raised by Trump in his own initially failed ban on the company.

The America First approach has become consensus across both major parties, particularly when it comes to engaging with Beijing. Democrat nominee Kamala Harris, whose foreign policy views adhere to a tough stance on China (including on intellectual property theft), would maintain these in her own administration.

Regardless of which party and candidate wins the presidency and Congress in November, therefore, the trade war is likely to continue. That should be welcome news for South Africa, which should in turn use both the Forum on China-Africa Cooperation and bilateral platforms to push for more agricultural access to the Chinese agricultural market for itself and for other African countries.

Failing this, other more shrewd countries will close the gap for their own benefit. DM

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