As Donald Trump now, of course, President-elect Donald Trump secures another term as US President.
There are many in South Africa, especially in the economic know-how and apparatus of South Africa, speculating what it will mean for South Africa and other emerging markets.
Trump and Kamala Harris held opposing policies, especially when it came to economic policies, not so much
their personal policies but let's call it you know what Republican and Democratic a Democrat approach towards you know foreign aid towards foreign investment as well as even trade agreements between countries.So the current incoming
you know, party, the Republican Party.Let's be all fair that although Donald Trump is receiving much attention right now, he's part of the Republican, you know, ideology.
What impact will this have on trade, monetary policies, foreign relations, and climate initiatives, especially the last one, and what we know, of course, climate initiatives.
We discussed the matter with economist at Stellenbosch Business Schools, Professor Andre Roux.Professor Andre, thank you for joining us on Radio Islam International.
Thank you.Good evening and good evening, all your listeners.
Professor, what are the concerns that a Trump victory, of course, will have on South Africa's economy?Of course, it may or may not realize it may just be a discussion we're having in the next four years, nothing happens.
But is it a positive move for AGOA or maybe even a negative move that the Western Cape government may be even be pushing for that we need to be proactive in the way we deal with the new presidency?Your thoughts on that, Professor?
Yes, I think let's go back just one step and have a look at very real likelihood that he won the election on the back of economics.
Appealing to working-class Americans who feel the last few years they have borne the brunt of rising cost of living, of so-called immigrants and the rising gas price, as they call it, the petrol price. And I think that he's appealed to that.
And in so doing, he's really just sticking to his normal story of American nationalism, of American protectionism, protecting American industries and protecting American jobs.
So that would probably imply a new swathe of import tariffs on goods that America imports from elsewhere in the world, including possibly Africa and South Africa, but certainly China.
and then we have to start thinking about the relationship between America and China going forward.It's already troubled and no doubt Donald Trump will try to further stall imports from China.Now that serves to slow down China's economic growth rate
We know that China and Africa have a very interesting relationship.We know that China is one of the most, if not the most important destination for Africa's natural resources.
So, their economy is slowing down by implication, by derivation, that could be negative for Africa's growth.You mentioned AGOA.
That of course is an arrangement whereby America grants countries in Africa, within certain sectors, a situation whereby they are exempt of paying import duties into America, thereby hopefully making it easier and cheaper for us to export goods to America.
But they can remove a country on that list if they so feel.If they feel that a country in Africa is not really adhering itself to American policies, and all are abusing the terminology of human rights.
They could easily remove that country from the list of exemptions. So there's an area where we have to be very careful in making sure that we don't offend the feelings.
Then, of course, all of this is telling us that really, I don't think Donald Trump, I think he's rather indifferent towards Africa and to many other parts of the world.It's all about, in his view, America for America first.
So it's not a big deal for him, to be perfectly honest.The final thing to think about is that he has apparently, seemingly suggested that he will either reduce or even remove military-related aid to Ukraine.
And that will obviously also create some turbulence, instability in Europe.What will other European countries do?He's also committed to try to bring about peace in Ukraine and even the Middle East.
If he succeeds in that, that should be good for the oil price.
You know, many people, of course, at least from a South African perspective, in the last day have been discussing the impacts on AGOA, viewing it as something, as a negative outcome.
But in reality, if we wanted to look at a Republican administration, and let's take even the Trump name away and view it as a Republican administration,
There's a genuine chance that they of course short-term gains at least for South Africans and other Investors globally in the sense that you know if he pushes down US interest rates delivering on promises that you know We're gonna make it easy for the American public to afford houses to pay down credit cards to pay down loans It may drive capital towards higher yielding markets and we stand in line to gain in that way your thoughts on that professor
Up to a point, of course, returns are very important, but so too is risk perception.And we all know that rightly or wrongly, many African countries are deemed to be rather risky.
But just another point, and this is an interesting one, it might turn against him.You know, if he is going to make it more difficult for America to import, say, Chinese goods,
or more expensive, we might see the inflation rate in America moving in the wrong direction, moving upwards.And that might put a hold on further interest rate drops, which would in turn favor, ironically, the dollar.
So we saw yesterday, for instance, after the results came out, the dollar actually strengthened.
That might have just been a temporary thing, but I think we are seeing the markets suspecting that interest rate declines in America might not be as fast as we thought just a few weeks ago.
As I say, thereby strengthening the dollar at the expense of many other currencies, including the S.A.round.
Finally, Professor Andre, you know, in the introduction, I mentioned a bit about climate initiatives.20, 30 years ago, the discussion on climate was basically more of a social discussion than an economic one.
But in recent years, with the placing of tariffs, carbon taxes, et cetera, it has no doubt had a major impact on
on the price of an end product, especially a petroleum-based product, where it is produced, Western Europe, China, Japan, and their respective, you know, carbon regimes or tax regimes that they are willing to implement.
We've seen Donald Trump, you know, being in many ways, more ways than another, sort of a denialist, that, you know what, I'm going to fight all type of, you know, climate theology or climate hocus pocus, as he used the word,
How do we see this particular aspect of the economy, the bearing that climate taxes have under a Trump regime?Will he push back on those taxes?
Well, I think you're quite right.In fact, in the longer term, this could be the biggest single concern about his election.He is, I'm going to use your same words, in many ways, a climate change denialist.
which suggests she doesn't see as being a big deal.And that slows down stalls. the global attempts to mitigate against climate change, that is certainly not good news for anybody, and especially not for Africa.
Unfortunately, Africa, whilst probably least responsible for climate change, is a continent that is the most vulnerable in respect of things such as crop decline, hunger, drought, obviously, famine, the same thing as hunger, and even rising sea levels.
So, as I said, the longer term, this could be the biggest single concern about his victory.
Professor Andre Roux, thank you for joining us on Radio Islam International with your insights.Thank you for your time, Professor, and for your comments.
That was an economist at Stellenbosch Business School, Professor Andre Roux, talking to us about a possibility of what a Trump presidency may look like.
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