America Archives - Solidariteit Beweging

Two assassination attempts, Biden’s Covid-19 diagnosis, a sudden change in the Democratic Party’s presidential candidate, numerous newsworthy debates, two huge hurricanes and a McDonald’s visit later, and we are finally on the eve of the American presidential election.

South Africans have been closely watching this roller coaster of events from the very beginning. Some South Africans are even more familiar with American politics than they are with our own politics. However, this interest is not a strange phenomenon, nor is it an unnecessary one.

Jaco Kleynhans, the Solidarity Movement’s head of international liaison, explains that America is still the world’s most powerful superpower, and it will remain as such for a few years to come. Therefore, South Africa has a major interest in being aware of the influence this superpower can have on our economy.

“Economically, South Africa depends strongly on trade with the USA and on investments from this country. What happens in America affects us all because it affects our exchange rate, as well as commodity prices, trade relations and global political and economic variables,” Kleynhans explained.

Kleynhans is a political expert with a particular interest in international politics. Part of his duties is to inform Afrikaners about the latest political events in the world and the influence of such events on South Africa. He does weekly talks on Afrikaans radio stations, writes articles for the Afrikaans media, and has his own podcast Wêreldwys (World Wise) where he explains complex politics in an understandable way to the public.

However, American politics is one of Kleynhans’s particular preferences. At one stage, he was himself involved in an election campaign for George W. Bush. Kleynhans will be in the USA from 5 November to report on developments in the election to South Africans. After the election, he will undertake a three-week tour of the USA, visiting Michigan, Wisconsin and Texas, among others, to discuss the Solidarity Movement’s cause with those interested in it.

“We engage with both Republicans and Democrats and have no motive to take sides. I will be meeting with members of both parties across the US, and in particular in Washington DC over the next three weeks. There are many Republicans and Democrats in the United States Congress who are interested in what happens in South Africa, and with whom we have already established a good rapport.”

For some years now the Solidarity Movement has been canvassing international support for South Africa and for Afrikaners. Jaco is one of the main players in this regard.

“For the past two years, I have been working on fostering ties with legislators in various states. We are about to draft important resolutions for consideration in some of the states’ legislatures. This may have far-reaching consequences.

Moreover, we have very sound contacts in in the Congress in Washington DC and with organisations that influence political policy. In my discussions with dozens of influential persons I will deal with various issues such as the Government of National Unity (GNU), AGOA, the position of minorities in South Africa, the BELA Act, the planned NHI, crime, BRICS, the ANC’s ties with Russia, China and Iran, while I will also focus on the work of the Solidarity Movement as well.”

Who does Kleynhans think will win the election, and what would the consequences be of such a result for South Africa?

If he has to take his best educated guess, Kleynhans believes Trump stands a good chance to win, but it will depend on who will be voting.

“Economically, a Trump victory can bring great opportunities and risk. The main opportunities are in trade as Trump is planning strong action against China. This will create new opportunities for South Africa to export even more products to the USA”.

Afrikaners have organised a massive march against the BELA Act (read more about it here) on the same day the American presidential election is taking place. For Afrikaners, to hold a protest march is a rare cultural phenomenon, and this day will certainly have a historical impact. Despite our own political turmoil and upheaval, America can know for sure that South Africans will still watch the American election with a hawk’s eye.

Jaco Kleynhans, the Solidarity Movement’s head of international liaison

Theuns du Buisson

Source: Maroela Media

During the latter part of every year numerous organisations issue their lists of global risks for the next year. Major companies use these lists to do their planning to ensure that they are hedged against those risks.

In addition to all the usual matters, natural disasters, political uncertainty and so on, there is a new one this year: “Trump’s protectionism” which, according to the World Economic Forum (WEF), poses a significant risk to the global economy. I have never really been bothered by the WEF’s talk about how the globe would go up in flames at any moment if we do not trade beef for bugs. Unfortunately, however, many influential people take the WEF’s talk seriously.

Protectionism

This outdated policy is widely regarded as a major obstacle to economic growth, and rightfully so. It involves imposing duties to keep importes out of a country, thereby promoting the local industry. For example, South Africa imposes duties on steel and chicken meat imports. The end result is that steel and chicken are very expensive without us having a significant chicken industry, while the local steel sector still remains under constant pressure.

In short, protectionism is based on the fallacy that in trade there are winners and losers. The reality is that in proper trade everyone is a winner.

However, duties are also imposed for other reasons. For example, if a country uses slave labour, duties can be imposed to punish the exporter without, however, stopping the purchase of those products. The only ones actually punished are the consumers of these products because they have to pay more for the product while still having to soothe their conscience about using the products of slavery. Then there are other considerations too, such as the enormous duties imposed on CCTV equipment from China which, according to numerous experts, is used to spy on the entire world. The best-known duties are anti-dumping duties which are introduced to prevent another country from dumping their cheap, often inferior products in a country, destroying the local industry, and then it continues to export products at normal prices and volumes without the burden of a competitive market.

Regardless of the reasons, it is an accepted truth that any trade restrictions, be they quotas, duties or whatever else, are bad for the global economy. It is estimated that the global economy could double if all countries were allowed to export their specialist products without duties or other barriers.

How dangerous is it for South Africa?

Just as almost everyone accepts that trade restrictions and tariffs are bad, everyone also accepts that whatever is best for America is also best for the world. When America is doing well, the world is doing well. When these two general truths are at odds with each other it muddies the waters.

New duties and other trade restrictions make products and services more expensive for Americans, but they also create job opportunities and a more localised economy in America. Along with localisation come others risks that could be to the USA’s disadvantage in the long run. But then there are also numerous advantages. By moving factories back to the USA, major capital investments are made and even if many of the risks do play out it would be most unlikely that these investments would be undone by moving plants abroad again.

The main advantage of such a policy is that the USA will pursue energy independence. They produce their own oil, and with Trump’s proposed policy in place, it would be enough for their own needs and even for exports. This means that the rest of the world’s demand for oil falls, with the result that everyone, not just America, pays less for energy. Thus, everyone wins here and in today’s energy-intensive world, this is not to be laughed off.

Where South Africa, and everyone else are, however, directly affected is when it comes to exports to the USA. Here too, South Africa need not be too concerned. Most of our exports are raw materials and chemicals which are rarely, if ever, subject to duties. And even if that should happen, South Africa enjoys duty-free status under AGOA in respect of these products. The automative industry, which is directly in Trump’s sights, also enjoys this advantage. Our local industries will therefore enjoy a very strong competitive advantage. Unless AGOA comes to an end, or these local industries perish, we have little to be concerned about.

Is it really a risk then?

Any policy that suppresses economic growth or one that concentrates growth in one place only based on man-made circumstances is bad. Obviously, this is also a risk. However, for South Africa the biggest risk would rather be that our government continues to act in a hostile manner towards the West and that we are kicked out of AGOA as a consequence. In those circumstances, a more protectionist policy in America would only have disadvantages for us without any significant advantages coming our way.

Of course, all of this would only apply if Trump should move back into the White House. The alternative is another four years of poor growth and large-scale waste by the American government. And that is not good for anyone.