Fresh thinking needed to deal with Transactional Trump

LIKE Donald Trump, Johann Rupert is a complex, loud and unsubtle character. But he really likes golf and some of the world's leading sports stars are his friends. The chairman of the luxury goods company Richemont and Donald Trump share their love of golf with a mutual friend, Ernie Els. What Rupert knows, and Cyril Ramaphosa like many other international leaders will soon understand, is that for Trump, personal relationships are mightier than the sword.

Shortly after the 45th president of America was re-elected to be the 47th, Rupert “facilitated" a telephone call between Trump and Ramaphosa. The 15-minute conversation was significant. What we now know is that since November 5, 2024, Rupert has been proactively involved in efforts to influence the incoming US administration and to protect and promote South Africa's trade interests. For now, his focus is only on the African Growth and Opportunity Act (Agoa), a trade agreement that includes South African goods in tariff-free access to US markets, but Rupert probably also hopes to instil greater confidence in South African value chains.

When Trump, in his typically aggressive social media style, threatened a week ago to impose a 25% tariff on Canadian and Mexican imports if those countries did not stop the flow of drugs and illegal immigrants into America, Canadian Prime Minister Justin Trudeau boarded the first plane to Mar-a-Lago in Florida for a three-hour meal with Trump. Personal relationships are important.

As Chris Opperman of C5 Capital put it in an SABC News interview: “Trump is a transactional leader" for whom personal relationships mean more than any roundtable discussion. Multilateral agreements are a bore to him in his distractible instincts. In the final analysis, the Rupert phone call with Ramaphosa may make him doubt and dither when it comes to South Africa's trade interests. The president-elect has already made it clear that he wants to use import tariffs to protect American manufacturers, while Rupert wants to use his influence and access to the Mar-a-Lago golf course to convince Trump to the contrary. He certainly has a better chance of success than South Africa's department of trade, industry and competition.

The current spirit of pragmatism in the Joe Biden administration towards South Africa's unpredictable foreign policy has a shelf life with a noon, January 20 expiry date and time. The 20th amendment to the US constitution states that the term of office of a newly elected president begins at 12:00 Pacific Standard Time, when he or she is sworn in on what came to be known as Inauguration Day.

South Africa was the first African country to take over the rotating Group of Twenty chairmanship on December 1, 2024 during the Rio de Janeiro summit in Brazil. Trump is on his way here for the scheduled  annual summit, even it is only in November 2025.

I am not convinced that South Africa is ready to make real good use of the platform that the G20 offers. The ANC is riddled with ideological contradictions and led by a president who prefers to kick for the sidelines, rather than make the hard decisions. Without Rupert's mediation, a telephone conversation between Ramaphosa and Trump would have had the political value of a frumpery. I doubt whether Trump would want to take a call from a “shithole country" at this stage. Personal relationships therefore are important.

However, South Africa and the ANC's internal politics may just leave Ramaphosa room for manoeuvre when our foreign policy is in a pinch. Deputy president Paul Mashatile has presidential ambitions, but so do Ronald Lamola, Mmamoloko Kubayi and Panyaza Lesufi. The executive committee of the ANC in Gauteng and also KwaZulu-Natal will want to get rid of Ramaphosa as soon as the opportunity presents itself. Mashatile has already shown that he realises the president's situation within the ANC and the three-party alliance is fragile enough for him to start making political capital out of the general resistance to Ramaphosa's leadership. All these aspirants will follow his lead and use every opportunity to abuse potentially controversial policy issues for personal gain.

As Helen Zille insinuated last week, quite rightly, Mashatile is familiar with the various ideological forces currently threatening to split the ANC and he will sweep the Agoa agreement off the table if he has to. He has already exploited Solidarity's inability to read the political temperature within the ANC and opportunistically enter the dispute over the Bela act. His undisguised objection to the Bela agreement between Solidarity and the presidency was a shot across the bow of an unsuspecting Ramaphosa and in the process he acquired an enormous amount of political capital from the trade unions, ANC structures in Gauteng and KwaZulu-Natal and even within the national executive committee of the party. His next aim is to exploit the room for manoeuvre that an indecisive Ramaphosa has created for the renegotiation of the signed law on national health insurance.

Mashatile has already emphasised on several occasions that South Africa will uphold its sovereign principles in international relations, promote solidarity with oppressed nations and pursue a global economic system that eliminates discriminatory trade restrictions against African countries and the global south. If you read between the lines, it is clear that South Africa's deputy president is making an argument for the interests of the Brics alliance, rather than for the new realities that Donald Trump regularly spells out on X. The problem, however, is that for Trump it is a matter of “if you are not for us, you are against us”. With the dominant footprint of China in Brics, Trump's primary economic enemy, South Africa could very easily end up under the feet of the bullocking elephants.

However, economic realities cannot be ignored without a massive political price. Neil Diamond, president of the South African Chamber of Commerce in the USA, accompanied Ramaphosa to the New York Stock Exchange in September 2024 for the closing bell ceremony. Diamond points out that trade between the US and South Africa amounts to about $25 billion (R450 billion). We have an $8 billion (R145 billion) trade surplus with the US. This is new money entering the South African economy. More than 700 American companies have investments of about $7.5 billion (R135 billion) in the value chains of South Africa's manufacturing sector and also the mining industry. These amounts are substantial and create thousands of higher-income business and job opportunities without which South Africa's high-unemployment economy cannot do.

In an attempt to coddle dictatorships in Moscow and Beijing, the ANC in its ideological affinities sometimes ignores these and other realities. Compared to America, China's trade relationship with South Africa in no way promotes the development of our value chains through value addition. I once explained this reality to Prof. Anil Sooklal, South Africa's ambassador-at-large for Asia and Brics and he told me in front of an audience of 100 people to keep my colonialist mouth shut, in so many words.

South Africa currently has a trade deficit of about $9,43 billion (R180 billion) with China. Our exports to the world's second-largest economy are typically colonial and the result of the blood and sweat spilt in the mining industry. Unprocessed iron ore, coal, gold, platinum as well as ferroalloys and other base metals are loaded onto trucks and ships to China at competitive international prices. In contrast, we primarily import goods from China that are already the result of value addition. Broadcasting equipment, computers, electrical machinery, textiles, clothing and pharmaceutical products, all directly from the Chinese value chains, end up in our consumer markets. We cannot compete with Chinese workers when it comes to productivity and the competitively low costs of subsidised businesses.

With Trump back in the White House and international politics, our so-called pursuit of sovereignty and an independent foreign policy faces other obstacles as well. Ebrahim Rasool has been reassigned to his post as ambassador in Washington. He was our representative in the US between 2010 and 2015.

Rasool has strong opinions that would be certain to clash directly with those of Trump sometimes. In December 2023, he described the situation in Gaza as a “genocide". But, as Rasool himself argues, he and Trump at least share a philosophical concern for Nato – an important consensus, perhaps.

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Distaste typically American

Trump's approach to Israel indicates continued and possibly strengthened support for Benjamin Netanyahu in his conflict with Hamas and Hezbollah. Trump's distaste for the International Criminal Court (ICC) is typically American: “As far as America is concerned, the ICC has no jurisdiction, no legitimacy, and no authority. The ICC claims almost universal jurisdiction over the citizens of every country, which violates all principles of justice, fairness, and due process of law. We will never surrender America's sovereignty to an unco-ordinated, unaccountable global bureaucratic body." In June 2020, Trump authorised economic sanctions and visa restrictions on ICC officials involved in investigations of Americans. His support for Israel and its unpredictability and international isolationist tendencies, creates the context for his expected attitude towards Rasool and South Africa's position regarding the ICC as well as the Middle East.

South Africa's opinion could not be more different from Trump's and Rasool will probably have to temper his moral principles in his presence. Meanwhile, both international relations and co-operation minister Ronald Lamola and Ramaphosa have drummed it into Rasool that with Trump in the White House, megaphone diplomacy will come at a huge price. So much so that Rasool has now had to publicly admit that he will have to limit his statements about Israel and Gaza to backroom conversations rather than on social media. Or, as the ambassador told Daily Maverick's Peter Fabricius: “I understand the need to completely recalibrate.”

There can be little doubt that 2025 will be a defining year for South Africa in terms of our international relations. It is not only the Russians and China who rely on South Africa's unconditional political support, America and Donald Trump will make exactly the same demands. In an international political economy that does not tolerate fence sitters, our pursuit of independent sovereignty will be tested to the letter over the next 24 months. Personal relationships are important, and Ramaphosa may just find out that it makes sense to “recalibrate" – and keep Johann Rupert on “speed dial".

♦ VWB ♦

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