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Trump gets tough: SA set for devastating trade battle with the US

A major trade dispute with one of the biggest global super-powers? That’s just what our fragile economy needed: Here’s why SA is in the eye of a storm.

South Africa has found itself in the eye of a quickly-brewing storm this week, confounding its unsteady relations with the United States of America. Donald Trump has pushed for a significant revision to his country’s trade laws, and it could have devastating implications for us in Mzansi.

The rule-change by the Trump Administration reduces the amount of countries that can be considered “developing nations”. By doing this, it gives the US government a greater scope to review its own trade deals.

South Africa in the eye of a trade storm with US

Previously limited by who they could investigate, this bit of legal wrangling will now allow Trump and his team to identify which states are “harming US industries” with unfairly subsidized exports. South Africa has been named on that list, and we now face the prospect of being hit with higher trade and export tariffs with the US:

“Given the global economic significance of the G20, and the collective economic weight of its membership (which accounts for large shares of global trade) membership indicates that a country is developed. Thus, Argentina, Brazil, India, Indonesia and South Africa are ineligible for the 2% de minimis standard.”

US Trade Regulator statement

Why it’s bad news for Mzansi

The multi-billion rand industry that exists between SA and the US is, therefore, due a radical shake-up. Should the Trump administration decide that they aren’t getting a fair deal from our trade agreement, South Africa could be hit with large financial penalties – and it may even prompt something of a “jobs exodus” from our shores

We’re waiting with bated breath to see if the Republican leader and his Cabinet believe we’ve been charging them too much for our services. However, this isn’t the only issue causing friction between SA and US trade: Our newly-drafted Copyright Amendment Bill allegedly violates US Trade Regulator Laws, too.

Trump team talks tough on trade

In short, the proposed bill is seen as a threat to intellectual property rights – something America demand should be guaranteed if countries want to remain in the Generalised System of Preferences programme. The GSP allows duty-free entry into the America for 3 500 products, and South Africa could be kicked out if it’s seen to be compromising the rights of our artists and creatives.

And don’t even get Donald Trump started on land expropriation…