EXCLUSIVE: US May Introduce Sanctions Against South Africa

South Africa’s relations with the United States (US), which have been difficult for well over a decade, have deteriorated sharply over the past two years. Washington has become increasingly concerned at what it sees as South African behaviour that threatens US national security interests.

Pretoria has in turn taken a defiant line against the Americans, asserting South Africa’s sovereign right to choose what policies and associations it pursues.

The tensions have already created a situation where South Africa’s exporters face some of the highest tariff levels of any American trade partner. Last month the US boycotted South Africa’s hosting of the G20. The American government has subsequently said it would not host South Africa at the 2026 G20 in Florida. Last week South Africa’s foreign minister, Ronald Lamola, responded to the American G20 threat by saying that the US had a lot to learn about diplomacy and democracy.

For some weeks there have been fears in the South African business community that if the deadlock is not broken, an escalation of punitive measures may follow, of which direct sanctions on certain South African individuals and institutions would be an early possibility, graduating in time to sanctions against foreign institutions purchasing South African government debt.

Sanctions against individuals or institutions would greatly complicate the operating environment for South African banks, which could easily fall foul of global money laundering and terror regulations and licencing provisions if they did not freeze the requisite accounts. Sanctioning government debt would trigger a broad economic crisis in South Africa as interest rates would increase sharply and the currency would weaken amidst a drop in demand for South African bonds.

Late last week chatter began to swirl that a move towards initial sanctions was accelerating and that without intervention a sanctions regime might be directed towards South Africa within weeks.

Frans Cronje told The Common Sense that a sanctions regime would be a significant setback for the country but that this situation should never have been allowed to arise and that it could easily still be avoided by just getting some simple diplomatic basics right.

According to Cronje, “South Africa and the United States have considerable symbiotic interests… South Africa needs to raise levels of investment to secure an economic recovery and the United States has considerable financial resources and real interest in deepening investment into Africa. South Africa’s people are chiefly moderate centre-right conservatives who have a lot in common with Trump voters in America. On values there is a lot of common ground. Also, South Africa commands one of the most important maritime choke-points, the value of which has vastly increased as a consequence of attacks on Red Sea shipping… and America has interests in securing its presence in the Indo-Pacific region.”

“It is a simple matter to recast the discussion points between the two countries in the form of common interests and allied values. There are serious economic actors on both sides who would welcome that and commit capital accordingly. That is the purpose of diplomacy. But to date the people commanding and advising on how to do that have completely failed … the price of continued failure might be unimaginably grave.”