The Trump 2.0 effect - how the barrage of executive orders could jeopardise SA's wellbeing

Workers assemble a vehicle at the Mercedes-Benz manufacturing plant in East London, Eastern Cape, which employs about 3,000 people. Photo: Eric Miller

By Victoria O’Regan and Peter Fabricius

26 Jan 2025

From a foreign aid freeze to trade tariffs, the US president’s sweeping policy changes could have far-reaching consequences for South Africa’s economy and health sector.

US President Donald Trump’s move to reshape US policies on foreign assistance, trade, health and the environment have big implications for South Africa and the rest of the continent.

The flurry of executive orders that Trump signed in the White House on Monday, 20 January, could potentially have a devastating impact on South Africa.

Other executive orders signed by Trump included pausing the federal TikTok ban and creating the Department of Government Efficiency, headed by South African-born tech billionaire Elon Musk.

Trump also rescinded executive orders signed by his predecessor, Joe Biden, that had promoted diversity, equity and inclusion, and LGBTQIA+ rights, according to a Reuters report.

Here’s a look at some of his most significant orders, and what they could mean for South Africa.

US President Donald Trump holds up an executive order after signing it on 20 January, directly after his inauguration in Washington, DC. (Photo: Christopher Furlong / Getty Images)

Trump suspends US foreign assistance for 90 days

Trump signed an executive order temporarily suspending all US foreign assistance programmes for 90 days, pending review, to determine whether they are consistent with US foreign policy.

According to the order, the US “foreign aid industry and bureaucracy are not aligned with American interests and in many cases antithetical to American values”, and “serve to destabilise world peace by promoting ideas in foreign countries that are directly inverse to harmonious and stable relations internal to and among countries”.

It said “no further United States foreign assistance shall be disbursed in a manner that is not fully aligned with the foreign policy of the President of the United States”.

It was not immediately clear how much assistance would be affected by the order, and which contracts were likely to be affected within the 90-day period.

But of the foreign aid programmes that stand to be affected, the US government’s Aids fund, the President’s Emergency Plan for Aids Relief (Pepfar), is likely to be the most important.

The President’s Emergency Plan for Aids Relief, known as Pepfar, has been supporting HIV prevention, care and treatment programmes. (Photo: www.usaid.gov/south-africa)

The Deputy Minister of Trade, Industry and Competition, Andrew Whitfield, said the order for a review of all foreign aid could be “devastating”, especially for HIV treatment and research, and particularly through Pepfar in SA and across Africa.

“So there’s a window of opportunity over the next, I would say, few weeks and months, to really engage in a very proactive way, and to make sure that we have the right composition of delegation … to meet with the right people in the US from business, labour and from the political realm, the GNU and the administration here. And to get around the table, and to talk about how we can strengthen our relationship,” said Whitfield.

South Africa, with an estimated 7.8 million people living with HIV in 2023, has the largest Pepfar portfolio in the world. For the US financial year from October 2024 to September 2025, Pepfar allocated about $440-million to SA. Some of this funding goes to the Department of Health, but most of it goes to non-governmental organisations working on HIV.

“The Pepfar programme in SA tends to focus on technical support and supporting the key populations programme,” explained Francois Venter, head of the research and policy unit Ezintsha at Wits University.

“If Pepfar were shut down in South Africa, it would hurt a lot. About 20% of the HIV budget comes from Pepfar.”

The US Agency for International Development (USAID) could also be affected by Trump’s review. In 2024, USAID contributed $323-million, of which $265.6-million was for health, to South Africa.

The director of the African Centre for the Study of the US at Wits University, Bob Wekesa, said Trump’s order for a review of all foreign aid meant that “it’s very clear that agencies such as USAID are going to be defunded” and programmes such as Pepfar would be reduced – which “will have an impact across the continent”.

epaselect epa11843184 An activist displays a banner reading 'Future vs. Trump - Greenpeace' as he stands at the US embassy in Berlin, Germany, 21 January 2025. Greenpeace staged a protest by projecting a statement against the withdrawal of the USA from the Paris Climate Agreement and the rejection of previous climate protection measures. EPA-EFE/CLEMENS BILAN An activist for Greenpeace displays a banner outside the US embassy in Berlin, Germany, 21 January. (Photo: Clemens Bilan / EPA-EFE)

Trump withdraws from Paris Agreement (again)

The US will be one of only four nations outside the Paris Agreement after Trump signed an executive order to withdraw the country from the global climate pact again.

Trump abandoned the Paris accord during his first term as president, but Biden soon reversed his decision. The pact is aimed at keeping global temperatures from rising more than 2°C above pre-industrial levels, and to continue to pursue attempts to limit temperature rise to 1.5°C above pre-industrial levels.

The move comes after the hottest year on record, in which temperatures exceeded the 1.5°C threshold.

Dhesigen Naidoo, a senior research associate at the Institute for Security Studies and climate adaptation lead for the Presidential Climate Commission, said although the US has withdrawn from the Paris Agreement, it has not withdrawn its participation in the UN Framework Convention on Climate Change (UNFCCC) – in other words, the Conference of the Parties, or COP. But this poses concerns of its own.

“One of the safeguards to date is that the US was in the Paris Agreement, which means that the behaviour of the US delegation inside COP would be part of an overall constructive debate,” Naidoo said.

“Now that it’s withdrawn from the agreement, I imagine that, combined with the directives that have already gone out to US institutions around how they can talk about climate change, it’s signalling how the US is going to conduct itself in other conversations, including the UNFCCC.”

The US is a “very powerful delegation” and there is “a very real risk” that it could be disruptive, Naidoo explained.

“Even when the US was in more climate-positive regimes, for example the Obama and Biden era, the US wasn’t the easiest player in those negotiations anyway.”

Naidoo said the move not only weakens the multilateral system, but poses a threat to the US’s investments associated with climate action. He referred specifically to the Just Energy Transition Partnership, announced at COP26 in 2021 to help South Africa achieve a just transition in the energy sector. Of the $8.5-billion package pledged by the US and UK, among other countries, about $2.4-billion has been raised so far from the pledges to SA.

“It is more than likely that the US will pull out of that deal. They may stay in the deal and not put any money in it. That, in itself, may not have such a big impact.

“If, however, their actions lead to a change in policy of the other partners … then there could be a retardation in our missions around the JET [Just Energy Transition] as a package, and that’s a really big deal,” Naidoo said in an interview with Newzroom Afrika this week.

A technician at work at the Biovac Institute facility, part of the WHO’s technology transfer hub in Cape Town, 12 Sepember 2022. (Photo: Dwayne Senior / Bloomberg via Getty Images)

Trump withdraws from World Health Organization

The US will leave the World Health Organization (WHO), Trump said on Monday.

In the executive order, Trump cited a series of reasons for the US’s departure from the organisation, including the WHO’s “mishandling of the Covid-19 pandemic”, its “failure to adopt urgently needed reforms and its inability to demonstrate independence from the inappropriate political influence” of its member states.

He said the WHO continued “to demand unfairly onerous payments” from the US, arguing that China pays less.

Trump’s announcement was not unexpected. In his first term, he took steps to leave the organisation, rebuking the WHO for its approach to the Covid-19 pandemic.

The move means the US will leave the WHO in 12 months and stop all financial contributions, according to a Reuters report. The US is the WHO’s largest funder, donating $1.28-billion to the organisation’s budget for the 2022/23 two-year period, according to figures published by the WHO.

The US’s departure will probably undercut the organisation’s reach and harm global health cooperation, according to public health experts and foreign policy analysts.

“The US is the single largest member state in terms of contributions,” said Elizabeth Sidiropoulos, chief executive of the South African Institute of International Affairs. Its departure and the loss of its financial contributions will have a significant impact on the WHO’s activities in the short term, she said.

In Africa, Sidiropoulos said, there will be a “significant gap in financial resources that would have ordinarily come from the US”.

The longer-term impact, according to Sidiropoulos, is the loss to the WHO of the “technical know-how and scientific contribution” of an important country.

In a statement issued in response to Trump’s announcement, the WHO said it “regrets” the US decision to withdraw, saying the WHO played a “crucial role” in protecting people’s health.

“The US was a founding member of WHO in 1948, and has participated in shaping and governing WHO’s work ever since … For over seven decades, the WHO and the US have saved countless lives, and protected Americans and all people from health threats,” it said.

“We hope the US will reconsider and we look forward to engaging in constructive dialogue to maintain the partnership between the US and WHO, for the benefit of the health and wellbeing of millions of people around the globe.”

Trump pulls US out of global corporate tax deal

Trump’s withdrawal from the Organisation for Economic Co-operation and Development (OECD) Global Tax Deal will affect Africa.

In an executive order, Trump said the tax deal, supported under Biden, “not only allows extraterritorial jurisdiction over American income”, but also limits the US’s ability to “enact tax policies that serve the interests of American businesses and workers”.

“Because of the Global Tax Deal and other discriminatory foreign tax practices, American companies may face retaliatory international tax regimes if the US does not comply with foreign tax policy objectives.”

The deal intends to impose a minimum tax of 15% on multinational enterprises in all the jurisdictions where they operate. The aim is to stop multinationals avoiding tax by shifting their profits to their home countries or to tax havens.

The practice has contributed to illicit financial flows from Africa, which the UN once estimated to amount to about $88.6-billion a year.

Trump orders trade review

Apart from ordering a major review of all of America’s trade with the world, Trump specifically ordered a review of the effectiveness of import tariffs on steel and aluminium in the interests of national security.

That raised the possibility of a further increase of the already raised tariffs of 25% on steel and 10% on aluminium that Trump imposed in March 2018, during his first term, on SA and many other countries. They remain in place.

So, the potential for SA to be affected by wider increases in import tariffs is real – apart from the ever-present danger of losing its duty-free access to the US market under the African Growth and Opportunity Act (Agoa), which many Republican and some Democratic legislators have threatened against SA.

Whitfield told Daily Maverick that he remained optimistic that Agoa would be renewed this year with SA still part of it, as it had always enjoyed support from both houses and both parties in the US Congress.

“And I think that Agoa is for the US a very important foreign policy tool,” he said. However, he noted that most of SA’s trade with the US does not fall under Agoa.

“And so that may very well be subject to some pretty harsh increases. But, at this point, there’s no specific detailed indication of what that might look like – other than the President’s comments around BRICS nations, which he made, I think, in the Oval Office while signing the executive orders,” said Whitfield.

South Africa. Eastern Cape. Port Elizabeth. A mechanic working on a car at the Mercedes Benz factory in Port Elizabeth. Workers assemble a vehicle at a Mercedes-Benz manufacturing plant in East London, Eastern Cape, which employs about 3,000 people. (Photo: Eric Miller)

In a clip that went viral on social media, Trump was asked by a journalist what he would do about Spain not meeting its obligations as a Nato member to spend at least 2% of its GDP on defence. Trump seemed to think Spain was a member of BRICS (possibly confusing the “S” in the acronym for Spain rather than South Africa) and he repeated his recent threat to slap 100% duties on imports from all BRICS countries if they went ahead and created an alternative currency to the US dollar.

Whitfield said 100% tariffs “would obviously be devastating”, but he did not think BRICS intended to create a new currency. Its members just planned to trade more in their own currencies.

XA Global Trade Advisers director Donald MacKay thought the greater impact on SA of Trump’s “explicit return to mercantilism” might be indirect, via Trump’s trade measures involving China and other large economies. During his campaign, Trump threatened a 25% hike in tariffs on Chinese imports and, after taking office, he issued a new threat of a specific 10% punitive tariff on China for allowing the destructive drug fentanyl to enter the US.

MacKay said if Chinese steel exports to the US were slashed, this would add supply to an already swollen world steel market and reduce prices, including for SA.

But MacKay added there could also be opportunities for SA and others because, if Chinese electric vehicle exports to the US were cut, their prices would also drop, giving SA a chance to get into electric vehicles more cheaply.

America’s large deficit with the world is mainly caused not by unfair trade practices of other states but by its “propensity to overconsume”, MacKay said. He also noted that even though the US runs a huge overall trade deficit in goods, it runs a massive trade surplus with the world in services.

One beneficiary of Trump’s trade policy could be Kenya. J Peter Pham, a former US special envoy to the Great Lakes and the Sahel – who has been tipped as possible assistant secretary of state for Africa – has said he believes the negotiations for a free trade agreement with Kenya, which started during Trump’s first presidency but were suspended under Biden, will now be resumed. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.

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South Africa

Trump suspends US foreign assistance for 90 days

Trump withdraws from Paris Agreement (again)

Trump withdraws from World Health Organization

Trump pulls US out of global corporate tax deal

Trump orders trade review