News / African trade takes a 'soft pivot' away from the US – but leaves door open

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Donald Trump’s presidency is forcing a trade rethink among African governments, with South Africa’s diversifying trade with Latin America part of a “soft pivot” away from the US with indications that the superpower may not be able to win it back.

The Loadstar has reported on the increasing trade between Africa and Latin America in recent months, with forwarders seeing the lane as a bright spot in an otherwise weak year.

Sources said far from a simple case of opportunistic growth, Brazil and South Africa had been looking to strengthen ties to signal that they will not be taken advantage of, while also providing a partial shield against the battle for supremacy between China and the US.

“Trade ties between South Africa and the US have never been as strained as they are now,” one source told The Loadstar.

“So, the growth we are seeing between Latin America and South Africa is means to diversify from any dependence on the US, and through the BRICS arrangement, South Africa and Brazil already have a relationship.”

Data from Container Trade Statistics (CTS) shows significant growth in South America to Sub-Saharan Africa volumes, with an average monthly growth rate of more than 8%.

While that trade recorded only a single month of year-on-year decline (February -1.1%), Sub-Saharan Africa to South America trade was a little patchier, with declines in April, June, and July (the most recent month on record).

Even so, January, February, March, and May all showed double-digit increases averaging a growth rate of 25.6%, year on year, with May’s the strongest, at 33.6%, to 2,900 teu.

One of the key criticisms the BRICS trade bloc has faced – and the main suggestion as to why it has struggled to offer any sort of genuine rival to the US-led order – is that it is seen as a purely transactional arrangement.

Asked if they saw the shift as part of a broader realignment towards the BRICS order, one source said, “it is a difficult one”.

They told The Loadstar: “It is between pragmatism and deeper alignment with BRICS in any case. Yes, there has been a move away from the traditional partners (US as the primary), and yes, there has been a deeper alignment with the east.

“And in South Africa that is culturally as well, with the ANC government now much closer on cultural issues to the east than it is the west.”

They suggested that what was happening could be seen as something of a “soft pivot” away from the US – leaving the door open should President Trump or his successor prove less hostile.

But they added: “It is also part of the longer history and most definitely part of the future vision.”