G20 Boycott Strengthens SA Position as US Price Pressures and the Supreme Court Offer Tariff Offramp

What began as an attempt by Washington to isolate South Africa has shifted the balance of advantage in South Africa’s favour. According to a client note from advisory firm Frans Cronje Private Clients the boycott has handed the South African government domestic and international sympathy not to bend to the United States (US) on tariffs.

More important, says the note, is that this sympathy now intersects with two forces inside America that may prove decisive in how its tariff strategy plays out.

First is the growing pressure on the Trump administration to roll back tariff regimes for domestic economic reasons. A November poll found inflation had become the top national problem for Americans while only 38% of Americans approved of the administration’s handling of inflation. Even amongst Republicans support for the handling of inflation is likely to slide toward the 50% mark.

The political consequences are already apparent with Republicans having suffered resounding losses from Virginia to New Jersey and California in the first major electoral tests for the party since Trump took command of America earlier this year. In this climate the push to cut tariffs has already begun as has been seen with duties coming down on South African orange exports. When price pressures intersect with electoral losses tariff relief becomes a political safety valve.

Second is the pending decision of the United States Supreme Court on the legality of key elements of the current tariff framework. The note states that the Court is likely to find against parts of that framework. Should that happen the Trump administration gains a face-saving mechanism to step back from a tariff strategy that is intensifying frustration among voters without having to directly concede anything to Pretoria. The note goes as far as saying that a positive ruling for exporters may generate a significant global sentiment boost.

Diplomatically, quiet efforts continue on both sides of the Atlantic to find a negotiated landing zone. Officials in Pretoria include strongly pragmatic voices who favour stabilising relations. There are similar voices in Washington yet they run into resistance from hardline elements inside the US administration. This means a negotiated settlement remains possible but it is no longer the only path towards a degree of tariff relief with domestic American economics and the Supreme Court now constituting a more likely route through which a degree of tariff relief will be achieved.