The US-South Africa trade talks.

By: the Glacier Invest Team

Over the last few months investors have seen the effects of the increased volatility on their investments due to increased geopolitical tensions. However, markets have continued their upward trajectory despite all the noise, benefitting clients who have remained invested.

After the well-publicised Oval Office meeting between South African President Cyril Ramaphosa and United States President Donald Trump, the statesmen engaged further to discuss bilateral trade and economic relations. According to official statements, the discussion included a constructive exchange on key issues. Some progress has been reported on trade-related matters, with further engagements expected and optimism for a positive outcome.

Trade, investment and tariffs

On Monday, 19 May 2025, SA Ministers of Trade & Industry, and Agriculture met with the US Trade Representative Jamieson Greer to present the trade framework agreement, following which a revised trade proposal was submitted on Tuesday, 20 May. The discussions centred on beneficial trade between the US and SA, with SA wanting to avoid a higher tariff after the 90-day pause expires in July.

Proposals in the framework agreement included:

• Incentives to encourage US gas supplies to SA as the country’s traditional sources of gas are running out. The proposal to acquire more liquefied natural gas from the US was well received.
• Incentives to boost US mineral exploration in SA since SA is an important provider of critical minerals to the US. The incentives to encourage exploration and mineral beneficiation were positively received. With regards the African Growth and Opportunity Act (AGOA), no definitive answer was given on SA’s continued participation, but a forum would be convened later in the year for African countries to present their case.
• A review of black ownership regulations for foreign companies included a reference to equity equivalence – a programme that enables foreign companies to comply with SA black ownership requirements by making investments in training, job creation or infrastructure instead.

Implications for investors

Taking the last five years into consideration – with COVID, the Russia-Ukraine conflict, Donald Trump losing to Joe Biden and then beating him again, the Israel-Palestine conflict, the ANC support falling below 50% for the first time ever in a national election, global bond yields rising sharply, interest rates rising more quickly than at any time since the Global Financial Crisis, high inflation in many countries, the formation of a Government of National Unity (GNU), KwaZulu-Natal riots and floods and now the potential termination of AGOA – believing that markets would have done poorly is not surprising.

However, over the last five years until the end of April 2025, the SA equity market via the All Share Index has delivered an annualised return of 16.97%, which is a strong return for investors.

The age-old adage rings true – that time in the market is better than trying to time the market. Company earnings have remained robust despite all the macroeconomic and geopolitical challenges mentioned.

The trade dialogue between SA and the US has implications not only for the markets, but for investors too. We know that your clients look to you for reassurance during challenging times in the market. As always, we are committed to keeping you updated and will provide insights as more information becomes available.