The pivotal and definitive outcome of the historic United States (US) elections for control of the White House and the Congress has wide-ranging implications for the US economy and for the rest of the world.
In commenting on the outcome of the crucial 2024 US elections, Prof Raymond Parsons, economist from the North-West University (NWU) Business School says the American electorate has spoken.
“The clear focus by President-elect Trump will be mainly on the US economy. While the decisive American election mandate has strengthened political certainty within the US, it has heightened market volatility and uncertainty elsewhere, including among emerging economies.”
Prof Parsons points out that the US financial markets and dollar have strengthened in the immediate aftermath of the American elections, but the rand, for example, has already weakened. Policy uncertainty may eventually prevail over political continuity in the current global economic outlook.
“Political rhetoric will eventually be converted into policy outcomes such as heightened protectionism by the Trump administration next year. Among the more tangible immediate policy commitments by a Trump presidency are a general US tariff imposition of 20% on all imports and as much as 60% on Chinese imports. As a small open economy, South Africa has a vested interest in the multilateral trading system.”
The greater risks to South Africa’s overall exports in general, and also whether it will eventually affect the AGOA duty-free benefits in particular, are what is of importance to the South African economy about a Trump victory and the prospect of higher protectionism.
“In the light of the latest American political changes South Africa will therefore need to redefine its economic diplomacy with the US in ways that safeguard the basic shared economic interests that we still have with America, regardless of political changes there.”
According to Prof Parsons, this is also embedded in former President Thabo Mbeki’s recent call for South Africa to review and adjust its foreign policy stances in the light of major shifting geopolitical trends in general.
“Nonetheless, irrespective of the outcome of foreign elections, South Africa’s Government of National Unity (GNU) must continue to prioritise implementing the right domestic policies needed to build South Africa’s economic resilience.
“The way to offset any adverse external trends is to ensure that South Africa’s economic house is in order, so as to achieve higher inclusive growth.”
