The relationship between South Africa and the U.S. once seen as a model of post apartheid reconciliation and diplomatic cooperation has drastically deteriorated. It has become a sandbox for testing economic pressure in international relations. Tension rose throughout Donald Trump’s first term and intensified during Biden’s administration. Now, in Trump’s second presidency, we’re seeing open hostility.
What began as ideological divergence has hardened into a defining geopolitical rupture between Washington and Pretoria over issues like land reform and BRICS cooperation escalated dramatically under Biden when South Africa refused to condemn Russia’s invasion of Ukraine and later initiated a genocide case against Israel at the ICJ. But the rupture became irreparable in 2025 when Trump, in his second term, declared open economic warfare against what he called South Africa’s “anti-American, anti-white government.”
This diplomatic issues followed Trump’s February 2025 executive order severing all U.S. funding to South Africa – an action justified with accusations of “anti-white land seizures” (a claim thoroughly debunked by South African authorities, including the National Police Commissioner who dismissed it as “twisted fabrication”) and alleged support for “bad actors” including Hamas and Iran. Simultaneously, his administration imposed devastating tariffs: a 10% universal import levy plus targeted 25% duties on steel, aluminum and automobiles sectors accounting for nearly R40 billion in annual exports to the U.S. under AGOA.
The automotive sector alone, which ships one-third of its production to America and employs over 100,000 workers and South Africa AGOA benefit is under-threat . The situation reached a breaking point with the unprecedented expulsion of South African Ambassador Ebrahim Rasool in March 2025. Secretary of State Marco Rubio branded Rasool a “race-baiting politician” hostile to America after the ambassador remarked that Trump is “mobilising a supremacism” and using “white victimhood as a dog whistle” amid U.S. demographic shifts.
Facing sanctions and threats to economic stability, Pretoria has tabled a deal: $1 billion in annual U.S. LNG imports from the U.S in exchange for restoring trade access and savaging the current diplomatic situation. Yet the deal comes with unspoken conditions. The fallout extends beyond trade. South Africa’s BRICS membership, Ukraine neutrality, and anti-Western rhetoric are seen as principled non-alignment, Trump reportedly encouraged by former advisor Elon Musk sees them as signs of hostility.
Ironically, Trump who once offered fast-track U.S. citizenship to white South African farmers has become the unlikely force compelling Pretoria to choose between ideological allies and economic survival. The mechanics of this forced choice reveal how dramatically the tools of economic coercion have evolved.
AGOA and the US: A Shifting Balance of Trade Power
Usage of economic coercion continues to change far above just simple sanctions. Trump’s employing this approach to South Africa has once again highlighted how powerful and accurate this method can be when used in targeting vulnerabilities, similar to China’s successful pressure campaign against Australia in 2022, where trade restrictions on wine, barley, and coal were imposes to extract political concessions.
The African Growth and Opportunity Act (AGOA), signed by President Clinton in 2000 as a strong symbol of America’s commitment to development in Africa, has become the primary weapon in this economic arsenal. For South Africa, AGOA isn’t just trade policy it’s an economic lifeline. The program has enabled South African exporters to avoid $116 million in tariffs annually while supporting key sectors (59% of manufacturing exports) and agriculture (75% of agricultural exports) that define the country’s industrial base and generate employment. Yet this preferential access is under threat, with severe consequences for South Africa’s economy.
On February 18, 2025, four Republican members of Congress submitted a letter to President Trump urging him to revoke South Africa’s benefits under the African Growth and Opportunity Act (AGOA); the lawmakers accused South Africa of being “an unreliable partner undermining U.S. interests.” citing its neutral stance on the Russia–Ukraine war, closer ties with BRICS, and continued diplomatic support for Palestine at international forums.
In 2021, South Africa sold $14.7 billion worth of goods to the United States, which amounted to 13.3% of the nation’s total global exports. When compared, those exports represent less than 1%(0.44%) of total U.S. imports, demonstrating the trade imbalanced importance to South Africa. It was also stated according to the International Trade Commission data, South Africa has been AGOA’s largest non-crude export beneficiary, with $55.9 billion in cumulative exports since the program’s inception making the threatened loss particularly devastating. Between 2019 to 2023, South Africa trade surplus with the United States increased by 45% yearly. These exports were concentrated in a few major sectors such as cars and parts, which increased by 43.6% in recent years, chemicals (33.1% growth), and aluminium (13.4%) altogether, supporting hundreds of thousands of jobs.
Trump’s tariff strategy, a 10% universal import levy plus targeted 25% duties on steel, aluminum, and automotive goods strikes at the heart of South Africa’s industrial economy, effectively crippling AGOA’s trade benefits.. The automotive sector alone, which exported $1.6 billion in vehicles to the U.S. in 2023, faces potential production relocations by multinational firms like BMW, Ford, and Volkswagen. With 100,000 direct jobs and 400,000 supply chain positions at stake, entire industrial hubs in the Eastern Cape, Gauteng, and KwaZulu-Natal hang in the balance. The broader economic consequences are also alarming; estimates predict that the loss of AGOA could shrink South Africa’s GDP by 0.4 to 0.5%, lead to hundred of thousand job losses in export-driven sectors, cause a 3–4% depreciation of the rand, and raise inflation by at least 0.5%. Trade between the U.S. and South Africa represents just one layer of their economic relationship. Considering Investment, Over 600 American companies have established operations in South Africa. These companies run substantial operations employing more than 120,000 in human resources. In 2022, American investment reached approximately $7.4 billion. Most of this came from two sources: profits generated by service-sector businesses and fresh capital being invested in new ventures.
The collapse of AGOA access not only threatens trade but could also dampen future investment and push U.S. supply chains to other African countries. Resulting in potential capital flight, declining foreign direct investment, and a weakened industrial base. The harsh reality of the economic pressure is clear, South Africa stands to lose a lot, while the U.S. would barely feel a thing. This trade imbalance doesn’t just create dependency. It hands the U.S. a significant advantage. South Africa sees this clearly. That’s why they’re pivoting toward energy diplomacy as their way out.
Energy Diplomacy Amidst Global Shifts
Facing potential economic suffocation, Pretoria has proposed a billion-dollar deal, importing 75-100 petajoules of American liquefied natural gas annually, valued at $900 million to $1.2 billion over the next decade. The timing is no accident. Right now, South Africa is going through its worst power crisis ever, with daily blackouts lasting between 6 and 12 hours, and President Cyril Ramaphosa has even declared a national state of disaster. Coal accounts for over 80% of power generation, but nearly all of Eskom’s 14 plants are plagued by breakdowns, corruption, and mismanagement.
While critical sectors such as healthcare have suffered as well, with refrigerated vaccines at risk, surgeries postponed, and ventilators disrupted. Load-shedding has also been blamed for damaging South Africa’s economic recovery, forcing firms to close or shrink operations while pushing up costs for those who stay afloat. Unemployment remains stubbornly high, youth joblessness is even worse, and inequality is entrenched, with a Gini coefficient of 0.67 highlighting South Africa as one of the world’s most unequal societies. Yet this desperate energy pivot cannot be understood without tracing its roots.
Mark Swilling’s publication “South Africa’s electricity crisis: a series of failures over 30 years have left a dim legacy” highlighted that South Africa’s power crisis has deep roots and is not in any way a sudden breakdown. But rather a product of 3 decades of missed opportunities and systemic corruption. In 1994, only 36% of South Africans had electricity at home. The African National Congress’ “Electricity for All” campaign under the Reconstruction and Development Programme had promised to double that by 2000, and it seemed within reach. During the 1980s, Eskom was so oversupplied with power that it surplus stations and due to cheap, cross-subsidized coal and efficient delivery, electricity remained highly affordable. But after the end of apartheid, policy shifted dramatically.
The GEAR (Growth, Employment and Redistribution) macroeconomic plan adopted in 1996 leaned toward privatization and limiting the state’s role, barring Eskom from new build programs and banking on Black-empowered private producers instead. Since cheap electricity prices were kept in place to protect industrial exports, these private investments never happened. A 1998 White Paper accurately predicted that the country would run out of electricity by 2008 if new plants weren’t built. Eskom warned of looming shortfalls, but its warnings were ignored. By 2007, the load-shedding began, and then-president Thabo Mbeki issued an unprecedented public apology for failing to act. Things worsened after 2009, as the state-capture era under Jacob Zuma turned Eskom and other public entities into vehicles for systemic looting. In 2010, South Africa took a $3.75 billion loan from the World Bank to build the Medupi and Kusile coal-fired power plants, but both projects fell victim to massive cost overruns, delays, and corruption. Zuma’s deal with Russia for a nuclear fleet, only stopped by a court case, further illustrated how energy policy was manipulated for political patronage rather than public need.
Even when renewables emerged as a lifeline, sabotage continued. The Renewable Energy Independent Power Producers Procurement Programme (REIPPPP), launched in 2010, had by 2015 lined up 13 new renewable providers capable of producing 5 GW of clean energy, enough to eliminate nearly all current blackouts. Yet Eskom’s then-CEOs Brian Molefe and Matshela Koko refused to sign the agreements, strangling renewable investment and forcing factories building wind turbines and solar panels to shut their doors. By 2023, the consequences were catastrophic.
Load-shedding reached up to 11 hours daily. Anyone under 17 years old had never experienced stable electricity. Eskom’s debt ballooned past R400 billion despite receiving R270 billion in bailouts since 2008. Only in 2024 did the government finally operationalize the long-promised National Transmission Company to unbundle Eskom five years after the roadmap had been approved. While the Energy Action Plan has enabled households and businesses to install 5.4 GW of rooftop solar (at a cost of over R75 billion), the crisis is far from resolved.
According to former Eskom CEO André de Ruyter, unless South Africa rapidly commissions vast renewable capacity, permanent scheduled blackouts will become a structural feature of daily life by 2025. That warning has still been largely ignored. The 2023 Integrated Resource Plan, instead of accelerating the transition to renewables, proposes to keep aging coal plants online and lean even harder on imported gas an expensive and climate-inconsistent gamble that will deepen South Africa’s dependence on volatile dollar-priced fuels.
With renewable energy insufficient to fill the gap and a daily power shortfall of 4,000-6,000 megawatts, LNG represents a viable transitional fuel. In 2024 Eskon and Sasol established a MOU to jointly explore LNG options to provide sustainable energy stability. Eskom and Sasol’s joint plan aims to repurpose coal plants for gas-to-power use and utilize existing infrastructure like the Rompco pipeline to transport LNG from the new terminal inland, mitigating gas shortage in South Africa, a shortage that is expected to start 2026 when Sasol begins cutting back on gas export from fields in Mozambique.
This could jeopardize up to 400,000 industrial jobs, primarily in Gauteng and KwaZulu-Natal. According to Minister of electricity & energy Khumbudzo Ntshavheni, the LNG deal will not replace current gas suppliers but complement them. The broader proposal of the 1 billion LNG deal also includes joint critical minerals exploration, duty-free quotas for 40,000 vehicles and components, and tariff-free access for hundreds of millions of kilograms of U.S. steel and aluminum, signaling deepening economic ties that may carry unspoken political expectations.
Some members of the ANC’s National Executive Committee are worried that President Ramaphosa might have been under quiet pressure when he met with former President Trump, with the U.S. potentially using trade ties to sway South Africa’s stance on Israel. Government officials, however, maintain that they will not drop the ICJ case. Even so, this could be a sign that economic pressure from Washington is already shaping how South Africa handles its foreign policy.
Conclusion
The shifting U.S.–South Africa trade relationship illustrates how economic coercion has evolved from blunt Cold War-era sanctions into precise tools for extracting political concessions. This shift reflects a broader erosion of the World Trade Organization’s principle which states trade should be governed by law rather than raw power. As both the United States and China adopt aggressive unilateralism, Thucydides ancient maxim “the strong do what they will, the weak do what they must” increasingly defines today’s relations. Pretoria’s LNG proposal may buy time but risks creating new dependencies that weaken its economic freedom and foreign policy autonomy. The lesson remains clear: as great powers discard multilateral constraints for economic coercion, economic vulnerability becomes a tool of domination rather than mutual prosperity.