Inside Cyril’s gift box for Donald

For the past week, Elon Musk and Starlink have occupied the front pages, assuming pride of place in Julius Malema’s furious social media posts. This is because, in a move that the South African government hoped would placate US President Donald Trump, communications minister Solly Malatsi proposed bending the 30% Black ownership requirement for foreign licensees.

But “equity equivalence” aside, what else has South Africa offered to calm the loins of the capricious Trump? One week after the fraught meeting in the Oval Office between Trump and President Cyril Ramaphosa, details are still scarce of what lay inside the gift box offered to Trump.

What we do know is that ahead of the White House meeting, trade, industry and competition minister Parks Tau and agriculture minister John Steenhuisen presented a “framework proposal” to US trade representative Jamieson Greer at a meeting on May 19. This wasn’t a “full trade agreement”, but rather a basis for negotiation.

Tau, speaking to journalists after the White House meeting, said South Africa offered to strike a deal to buy liquefied natural gas from the US, presumably duty-free, which is critical for South Africa, as Sasol’s natural gas from Mozambique’s Pande and Temane gas fields is running out.

This proposal was “positively received”, Tau said.

Another offer made to Greer was to export 40,000 South African vehicles to the country every year. This is a strategic offer, as vehicles are one of the main products produced under the African Growth and Opportunity Act, which is hanging in the balance. A firm commitment might provide a stay of execution for the trade deal.

But it seems the US was lukewarm on that framework. Greer pointed out “gaps and areas that they want us to pursue”, Tau told reporters. So, the next day, South Africa submitted a “revised trade proposal”, he said.

Critical minerals deals

What remains unclear is the extent to which South Africa offered to barter its enviable critical mineral reserves for US benevolence. Crucially, 90% of these minerals are exempted from tariffs.

This includes platinum group metals, which are essential to internal combustion engines, but also chrome, manganese, and rare earth minerals used in mobile phones and defence systems.

“Nine of those 12, we are the main provider of those critical minerals into the US market, so they are an important partner with regards to critical minerals,” said Tau.

Errol Smart, a consultant to the mining industry and the former CEO of the JSE-listed miner Orion, said these minerals have a geopolitical significance beyond simply their industrial utility. This is because China – with which the US is deadlocked in a trade dispute – accounts for 65% of all rare earth minerals mined, and 95% of all processed rare earth minerals. This standoff is an opportunity for South Africa to wrangle a long-term deal out of the US.

“Trump’s administration is transactional, and it is looking for deals that help it,” says Smart. “South Africa ought to begin thinking similarly and offering what it can in a similar vein.”

This transactional thinking was clear in a proposal that the Democratic Republic of Congo put to Trump, in which it offered access to rare earth minerals in exchange for US military assistance.

Nonetheless, Donald MacKay, analyst at XA Global Trade Advisors, warns that whatever South Africa offers Trump, it needs to tread carefully. Offering privileged access to the US might alienate other trade partners, such as South Africa’s Brics partners, he says.

“But Ramaphosa could say to the US: ‘South Africa has the minerals, so if you want them, come invest and fetch them’. And it could then offer to dismantle some of the more obviously trade-unfriendly mining policies which have deterred foreign investors until now,” he says.

What about grapes and citrus?

Rather than mining, MacKay says South Africa might have better luck bartering agricultural products.

“South Africa is counter-seasonal to the US, so it could offer specific deals on grapes or citrus, for example, which wouldn’t disrupt either country’s market badly,” he says.

“The White House has specifically said they want access for their blueberries into South Africa, so that could also be offered.”

While the US had flagged problems in trading its pork and poultry into South Africa, McKay says two trade agreements were struck during Barack Obama’s presidency, which give the US “pretty friendly terms” on these two products.

South Africa isn’t alone in scrambling to throw whatever proposals it can at Trump in the hope of placating him. The sooner a deal can be struck, the less volatility there will be.

Old Mutual Investments’ Hywel George this week pointed out that risks for the global economy “remain high” in the coming months. “One can take solace from the fact that it looks like Trump has a plan, but one has to recognise that the plan’s execution will be messy, and there are no guarantees it will work.”

The White House meeting, as scrappy as it was, provided a rare opportunity for South Africa to reset its trade partnership with the US, while Trump clashes with just about everyone else.

Ramaphosa, whose presidency has been characterised by lethargy, has just about held his nerve under fire from the White House. But to capitalise on this moment, what South Africa’s trade negotiators need to do right now is move a whole lot faster.

_{Top image: South African President Cyril Ramaphosa and US President Donald Trump. Picture: Chip Somodevilla/Getty Images; Rawpixel/Currency collage.}