Some economists weigh impact of US spat could have on SA economy

JOHANNESBURG - Some economists have started to weigh the impact the spat with the US could have on the South African economy as US President Donald Trump sows doubt among global investors.

This comes as Trump and some in his administration continue to criticise South Africa for its land reform policies including the Expropriation Act.

Since the Expropriation Act was assented into law last month, fresh concerns have emerged about Trump’s false framing of the impact the policy has on private property in South Africa.

Some Trump supporters include the richest and most influential business leaders.

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This has sparked questions about how far some billionaires are willing to go to prove their loyalty to Trump.

While economist Dale Mckinley says some foreign investors who are Trump allies could shun South Africa for now, he believes it's unlikely to dent the South African economy.

“I think the main risk on the economic side is whether or not it affects the renewal of AGOA [African Growth and Opportunity Act], otherwise I don’t see it having an economic impact on the shorter and medium term.”

Wits Business School Professor Jannie Rossouw agrees but warns against downplaying the impact.

“AGOA gives South Africa the opportunity to do value-added exports to the US. Those exports are very important because they can add jobs to South Africa.”

According to the US Trade Representative, US foreign direct investment in South Africa was more than $7.4 billion in 2022.