In one of the most tightly contested US presidential races in recent history, voters head to the polls today to decide between Democratic nominee Kamala Harris and Republican contender Donald Trump, with the world watching closely, Cape {town} Etc reports.
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Across the Atlantic, South Africans are closely watching the election outcome.
Political experts from North-West University (NWU) weigh in on the implications of a Trump or Harris victory for South Africa, including insights from Professor Kedibone Phago, director of the NWU’s School for Government Studies.
In an article for the university, Phago highlights two key issues for Africa, including South Africa.
‘The first is the African Growth and Opportunity Act (AGOA), a trade agreement between African countries and the US that allows duty-free access to US markets.’
‘South Africa is a major beneficiary, and its participation is largely a lifeline for AGOA.’
‘Excluding South Africa from AGOA would be both meaningless and counterproductive, though a Trump presidency might be expected to threaten this agreement.’
Phago notes that the US is a key trading partner for South Africa.
‘A Trump presidency could mean that South Africa’s geopolitical positioning may be put under immense pressure to either choose friends and allies of the US to maintain favourable and friendly relations with the US.’
Phago states that as the current vice president, Kamala Harris is likely to maintain most Biden administration policies and has already shown a positive stance towards Africa, including South Africa.
‘She is expected to support the continuation of AGOA with eligible African states that are benefiting from this agreement.’
Dr Sysman Motloung, an expert in South African politics and international relations at NWU, highlights in the article that the 2024 US elections centre on racism and sexism.
‘The 2024 US elections focus on issues surrounding racism and sexism, with some alleging that Donald Trump embodies these values, versus the restoration of reproductive rights, including abortion, championed by Kamala Harris.’
‘Trump has also been blamed for disrupting abortion rights in the US. However, he claims to protect women by addressing illegal border crossings and crime.’
‘The US elections are a domestic affair, with both presidential candidates making strong statements to portray each other as unfit for the White House.’
‘Kamala Harris describes Trump as ‘unhinged’, a ‘fascist’, a ‘Nazi’, and even compares him to Hitler, while Trump retorts by labelling Harris a fascist.’
Motloung observes that South Africans may find parallels in US political discourse, where terms like ‘rented black’, ‘anti-revolutionary’, and amasela (thieves) are common.
Investec Chief Economist Annabel Bishop says that a Trump presidency would likely harm the rand due to his protectionist policies, which create uncertainty.
In contrast, Harris has shown no signs of deviating from the policies of the Biden administration.
The rand has already shown signs of weakness ahead of the US election, averaging R17.53/USD due to global risk aversion, escalating geopolitical tensions and weak global production.
Bishop notes that the rand has declined as Trump’s rising poll numbers raise concerns about increased protectionism, tariffs and sanctions, suggesting it would likely weaken further under a Trump presidency.
Additionally, Investec Treasury Economist, Tertia Jacobs, says that South Africa’s economic landscape is influenced by US interest rates (which affect foreign capital flows).
‘A potential Trump victory, alongside a Republican sweep, could result in increased tariffs in early 2025 and tax cuts in 2026.’
‘Inflation could be revived, compelling the Fed to keep rates higher.’
Jacobs notes that a Harris victory would mainly impact US domestic policy.
‘A victory for Harris may primarily influence domestic US policy, with a platform focused on utilising tax increases to fund social spending initiatives, but a higher risk-free rate, with spillover effects to the rest of the world.’
Joe Klopper, a portfolio manager at Independent Securities, further cements the point that Trump’s willingness to influence the Federal Reserve and Harris’s support for an independent Fed could significantly impact South Africa’s financial stability.
In a Independent Securities article, Klopper says that Trump has pressured the Fed to lower interest rates, potentially directing capital to higher-yielding markets like South Africa, but his other policies might strengthen the US dollar, increasing costs for South Africa and creating volatility in its currency.
In contrast, Harris is expected to prioritise long-term stability with steady interest rate policies, which could help stabilise the rand and alleviate inflationary pressures from imports and dollar-denominated debt.
South Africa’s economy heavily relies on natural resources like gold, platinum, coal, iron ore and chrome, making global commodity demand crucial.
Both Trump and Harris’s policies will impact these sectors; Trump’s support for fossil fuels may keep global oil prices low, benefiting South Africa by reducing import costs, but his trade tensions with China could hurt demand for key exports like iron ore.
In contrast, Harris’s climate-focused policies may accelerate the shift to renewable energy, potentially reducing demand for metals such as platinum.
Additionally, South Africa’s reliance on coal could lead to US sanctions.
However, Harris’s initiatives might stabilise oil prices, improving South Africa’s trade balance.
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