Shifting tides: The splintering US-South Africa relationship

THE expulsion of South Africa's (SA) ambassador to the United States (US), Ebrahim Rasool, in mid-March marked a new low in the often contentious relationship between Pretoria and Washington. Triggered by Rasool's public criticism of US President Donald Trump's administration, the incident underscores the fragile nature of US-SA diplomatic ties.

- CASEY SPRAKE

Though economic cooperation has continued, particularly in trade, investment, and aid, longstanding ideological and geopolitical differences have frequently placed the two nations at odds on global issues.

This diplomatic flashpoint raises an important question (especially considering President Cyril Ramaphosa's meeting with Trump at the White House this week): Will it lead to a lasting rupture or offer an opportunity to recalibrate the bilateral relationship, potentially leading to a more constructive and mutually beneficial future?

Central to answering this are three economic channels that tie SA to the US: trade, foreign investment, and aid. Understanding the dynamics of these linkages is crucial in evaluating the broader consequences of the current fallout.

Channel 1: Trade at a Crossroads

Trade is a vital component of SA's relationship with the US. SA sends 9% of its exports to the US, a level on par with Brazil and China among BRICS countries. However, in terms of economic exposure, SA is less vulnerable than some others. Only 3.7% of its GDP is linked to US exports well below Mexico's 26% and comparable to the European Union (EU). This indicates that while trade disruption would be painful, it would not be devastating unless ties were completely severedan unlikely scenario.

A crucial trade mechanism is the African Growth and Opportunity Act (Agoa), a US law enacted in 2000 that grants Sub-Saharan African countries duty-free access to US markets. While Agoa is of minor significance to the US economy, accounting for just 0.3% of its total imports, it is vital for many African nations.