A South African delegation led by President Cyril Ramaphosa finally met face-to-face with US President Donald Trump in the Oval Office on Wednesday. While the meeting delivered some of the expected theatrics, the short-term impact on bilateral relations is expected to be minimal.
As Ramaphosa headed into the lion’s den, there were fears that Trump and his entourage would attack him in the same way they did Ukrainian President Volodymyr Zelenskyy earlier this year. Trump did indeed try to ambush the South African delegation with references to a discredited “white genocide” narrative.
The media conference culminated in a bizarre episode where Trump brandished tabloid newspaper headlines, dimmed the lights to play a video montage aimed at reinforcing his claims and gave Julius Malema the global spotlight. Ramaphosa, to his credit, retained his composure in the face of the provocation.
He was flanked, among others, by South Africa’s richest businessman Johann Rupert – a major farmland owner – and Democratic Alliance leader John Steenhuisen. It is yet to be seen if their words and presence helped to defuse Trump’s accusations that white farmers are being persecuted and that the government plans to expropriate their land, because Trump questioned why no legal action has been taken against Malema for inciting race-based violence.
The united front presented by Ramaphosa and his agricultural minister, Steenhuisen, was a minor triumph for the Government of National Unity (GNU). As Steenhuisen noted, the existence of the GNU is a rejection of the extreme policies of populist parties like the Economic Freedom Fighters (EFF) and uMkhonto weSizwe (MK) Party.
Even so, the event did not put South Africa in a flattering light for international audiences. It highlighted how the African National Congress (ANC) continues to struggle to address core policy issues at home. South Africans are in broad agreement that crime is out of control, fuelled in large part by an underperforming economy.
Furthermore, the ANC remains wedded to some economically unsound policies due to an ideological fixation on redress. The legislative process surrounding policies such as National Health Insurance and expropriation of land remain contested by the DA and other parties due to fears about their impact on the economy and individual rights.
The harsh reality remains that Trump has already withdrawn significant aid to South Africa, including critical HIV/Aids assistance programmes. This withdrawal of support, initiated months before the meeting, underscores a broader shift in US foreign policy under Trump: one that treats South Africa more like an ideological opponent than a strategic partner.
There were no new outcomes in terms of firm trade deals from the meeting. Both parties made vague commitments to further discussions on reducing tariffs and the US’s participation in the upcoming G20 Summit in Johannesburg. However, Ramaphosa did strike an optimistic tone following bilateral talks.
He told reporters that the two countries have agreed to discuss critical minerals in South Africa. Furthermore, South Africa has submitted a trade and investment proposal, which includes buying liquefied natural gas from the US. The fact that further talks are underway is encouraging, especially since US/South Africa relations have cooled under Trump.
A report from journalist Redi Tlhabi suggests that the private meetings between the US and South African delegations had a far more constructive and cordial tone than the events that unfolded for the cameras. She says that behind the scenes, the boring work of thrashing out the minutiae of a trade deal is underway.
The rand, JSE and South African bonds were largely unmoved by the meeting, which took place on the same day as Finance Minister Enoch Godongwana presented the third iteration of his budget. Away from the cameras, the US-South Africa relationship is in a holding pattern – strained, complex, and in the early stages of a reset.
“It’s the new Hunger Games of world politics – the televised Oval Office take-down by President Donald Trump.”
– CNN report
“One hopes that more constructive talks around trade and bilateral relations took place behind closed doors, but as yet, there have been no updates.”
– Andre Cilliers, currency strategist at TreasuryONE.
Global News
- Following a two-hour call between Trump and Russian President Vladimir Putin on Monday, Trump said on social media that Ukraine and Russia would “immediately start negotiations” toward a ceasefire, likely without the US. There was no sanctions threat, no demand for a timeline, and no pressure on the Russian leader. Trump followed that call by reaching out to European leaders, who fear Trump is pulling back from his efforts to end the war, leaving Ukraine and its allies on their own.
- On Tuesday, the European Union (EU) adopted its 17th sanctions package against Russia, targeting 75 more entities and over 180 tankers linked to the “shadow fleet” used to bypass existing embargoes. The measures also include asset freezes and financing bans on companies managing these vessels in Russia, the UAE, Turkey, and Hong Kong. Additional sanctions hit Russia’s military supply chains, organisations and individuals tied to cyberattacks, propaganda, and human rights abuses, reinforcing the EU’s stance amid concerns about declining US support for Ukraine.
- Moody’s downgraded the US’ credit rating from Aaa to Aa1 on 16 May, marking the loss of its last top-tier rating among major agencies. The decision reflects persistent fiscal deficits, rising debt, and increasing interest payments. Moody’s projects that by 2035, federal debt will reach 134% of GDP, up from 98% in 2024, with interest payments absorbing 30% of federal revenue. The downgrade also highlights political gridlock, with Congress failing to implement effective measures to address these fiscal challenges. Despite these concerns, Moody’s maintained a stable outlook, citing the US’s economic resilience and the global role of the dollar.
- Trump’s flagship Domestic Policy Bill narrowly passed in the House of Representatives and now heads to the Senate, with approval targeted by the end of August. Dubbed “big and beautiful,” the Bill includes a $4 trillion debt ceiling hike and tax changes critics say favour billionaires while hurting working families. Key measures include tougher Medicaid work requirements, expanded state and local tax deductions, a rollback of Biden-era clean energy credits, and increased funding for state immigration enforcement. Trump hailed it on Truth Social as “the most significant piece of Legislation that will ever be signed in the History of our Country!”.
- The market for US government bonds, the bedrock of the global financial system, continued to shudder yesterday after Trump’s “big, beautiful” tax Bill was passed. The bill has unnerved investors, deepening worries that the country’s debt is becoming unmanageable. This follows a Wednesday fall in stocks, bonds and the dollar over the Bill and concerns about the premier status of American assets.
- JPMorgan Chase CEO Jamie Dimon, warned that stagflation remains a risk for the US economy due to geopolitical tensions, rising deficits, and inflation. Speaking at the bank’s Global China Summit in Shanghai, he said the Fed is right to take a cautious approach to monetary policy. Dimon also cautioned investors against complacency, noting that in the current environment, America’s asset prices remain high while credit spreads aren’t accounting for the impacts of a potential downturn. “Credit today is a bad risk,” he said, adding that many underestimate the dangers because they haven’t experienced a major downturn or the effects of tariffs.
- In early May 2025, Inbound shipments to the Port of Los Angeles plummeted by up to 30% following Trump’s imposition of steep tariffs on Chinese imports, disrupting supply chains and reducing port activity. Although a subsequent 90-day tariff reduction, from 145% to 30%, led to a surge in ocean freight bookings, port officials caution that this temporary reprieve is insufficient for a full recovery, especially during critical pre-summer and holiday stocking periods. The ongoing trade uncertainty continues to strain logistics, with retailers facing challenges in inventory management and consumers potentially experiencing higher prices and limited product availability.
- The EU has shared a revised trade proposal with the US amid lingering scepticism that a transatlantic deal can be reached. The paper includes proposals that consider US interests, including international labour rights, environmental standards, economic security, and gradually reducing tariffs to zero on both sides for non-sensitive agricultural products as well as industrial goods, according to sources. Sent to officials in Washington earlier this week, the paper also outlines mutual investments and strategic procurement in energy, AI, and digital connectivity.
- Europe’s economy will grow slower than expected this year, dragged down by trade uncertainty from Trump’s tariffs, despite increasingly stable prices on consumer goods and energy, EU economists said on Monday. In its northern hemisphere spring economic forecast, the European Commission said it expected the GDP of the 20 countries using the euro to grow just 0.9% in 2025, down from the 1.3% previously forecast. Economic growth across the EU is expected to increase 1.1% in the same period, down from a previous expectation of 1.5%, the commission said.
- Britain and the EU on Monday struck a landmark deal to remove some post-Brexit trade barriers and to bolster cooperation on security and defence as they reduce their reliance on an unpredictable US. The agreement, unveiled by UK Prime Minister Keir Starmer and Ursula von der Leyen, president of the European Commission, is a significant reset for the two allies. Yet, final details of several important policies are not in place, and Britain had to make some concessions that could prove politically costly for Starmer, with an immediate and hostile reaction from his opponents.
- The UK has halted free trade talks with Israel and imposed targeted sanctions on Israeli settlers and organisations. In addition to the sanctions, the UK has committed over $5 million in humanitarian aid to Gaza, to be delivered through the British Red Cross and Palestinian Red Crescent. While signaling a significant shift in UK foreign policy, the UK government maintains that Israel remains an important ally, and broader sanctions have not been implemented. This deepens international pressure against Israel, with the leaders of France and Canada on Monday threatening action against Israel if it does not stop a renewed military offensive in Gaza and lift aid restrictions
- Google, during its annual developer conference on Tuesday, introduced several updates that aim to shift its ubiquitous search engine from being a box for processing keywords to a system of “digital agents” that can crawl the web and answer questions based on a person’s real-world surroundings, tastes and preferences. This underscores how Google’s most important business is facing more competition than ever from chatbots like ChatGPT and AI-fueled search engines such as Perplexity.
- Nvidia CEO Jensen Huang outlined plans on Monday to let customers deploy rival chips in data centres built around its technology, a move that acknowledges the growth of in-house semiconductor development by major clients such as Microsoft and Amazon.com. The announcement was made at Computex in Taiwan, Asia’s biggest electronics forum. Huang also blasted the “failure” of US restrictions intended to contain China’s technological ascent. He wants the White House to lower barriers to AI chip sales before China wins the top spot.
- Shares in China’s Contemporary Amperex Technology (CATL), the world’s largest electric vehicle battery maker, surged as much as 18% on Tuesday, its first day of trading in Hong Kong, shrugging off geopolitical uncertainties. The listing, the world’s largest so far this year, is the latest example of how Chinese companies are pressing ahead with their global expansion plans despite ongoing trade tension with the US. In January, CATL was added to a Pentagon blacklist of companies that it alleges work with China’s military, although it has denied such links.
- Novo Nordisk is seeking fresh leadership to reclaim its position in the rapidly growing weight loss drug market, as its obesity injection, Wegovy, faces increasing competition from Eli Lilly’s Zepbound. In a surprise move last Friday, the company announced the departure of longtime CEO Lars Fruergaard Jørgensen. According to one of our fund managers, Novo has made several communication missteps, for example, most of the press and even sellside has been favouring Eli Lilly’s pill and how it’s going to be first to market, when in fact Novo will have an approved product that will be ready to sell two years before the launch of Lilly’s Orforglipron, which still has some safety issues to overcome. The leadership change marks a break from recent missteps and presents an opportunity for the incoming CEO to reset the narrative and reinforce the company’s competitive strengths.
- Bitcoin continued its rally yesterday, hitting a new record high near $112,00, eclipsing the previous high from January, as risk sentiment continues to improve after last month’s tariff-induced sell-off. The gains coincided with continued weakness in the dollar. Some of the increase has been attributed to progress with the US’s first stablecoin legislation after weeks of political back-and-forth.
- As at Thursday’s close the S&P 500 was 1.9% down for the week.
Local News
- During a tense Oval Office meeting on Wednesday, Trump confronted Ramaphosa with claims of “white genocide,” showing a video of Malema chanting “kill the Boer” and reports of farm attacks. Ramaphosa firmly rejected the accusation, defending South Africa’s land reform as a lawful, constitutional effort to address historical injustices. Despite the challenging start, Ramaphosa later described the meeting as less dramatic than anticipated and noted constructive discussions on trade and diplomacy, including a possible G20 visit by Trump. The South African delegation – featuring golfers Ernie Els and Retief Goosen, and businessman Johann Rupert – sought to strengthen ties amid concerns over potential aid cuts and diplomatic strain.
- Finance Minister Enoch Godongwana said yesterday that the meeting appeared “positive” and signalled a potential reset in trade relations. On Wednesday, Trade, Industry, and Competition Minister Parks Tau confirmed that a trade package was submitted to the US on Monday, aimed at renewing the African Growth and Opportunity Act (AGOA) and reducing the paused 30% tariff on South African exports. The proposal, presented ahead of the Ramaphosa/Trump meeting, focuses on boosting trade and investment, including importing US liquefied natural gas. It also calls for a critical minerals agreement and addresses the impact of recent US tariffs on key export sectors such as agriculture and automotive manufacturing.
- Prior to the visit by the South African delegation, there was an indication that Ramaphosa planned to discuss business opportunities for Elon Musk’s companies, including Tesla, receiving favourable tariffs on its imports in exchange for building electric vehicle charging stations, the Presidency said on Monday. On Tuesday, this co-operation was apparently extended to an offer to Musk that will be a workaround of local black ownership laws so his Starlink internet service can operate in the country, according to sources. This was seemingly a reaction to Musk’s attack on empowerment laws, which he described as “utterly wrong and improper”.
- Ratings agency S&P Global gave South Africa its sign of approval ahead of this week’s presentation of the National Budget, affirming the credit rating and keeping it on positive outlook, although it warned it could still downgrade its rating if there was no progress on economic and governance reforms. It said that, despite disagreements with coalition partners over the National Budget, the government had managed to remain intact, which bodes well for broad policy continuity and reform momentum.
- On Wednesday, Godongwana announced the revised 2025 budget, lowering the economic growth forecast to 1.4% from 1.9% and projecting a wider budget deficit of 4.8% of GDP, up from 4.6%. The cancellation of a planned VAT increase, due to political opposition, has led to a revenue shortfall of R75 billion. Government plans to reduce spending by R69.4 billion over the next three years and impose an inflation-linked increase to the general fuel levy, with Godongwana saying that this was “the only new tax proposal that I am announcing”. Godongwana emphasised that if the South African Revenue Service fails to meet its revenue targets, further spending cuts may be necessary to maintain fiscal stability.
- The business community gave a measured response to Godongwana’s 2025 Budget, welcoming spending discipline and his avoidance of new tax hikes, while urging faster reforms to address sluggish economic growth. However, economists and industry bodies warn that inflation-linked fuel levies and unadjusted tax brackets will stealthily increase the financial burden on households, driving up the cost of living through the back door.
- Transnet received a R51 billion guarantee facility from the Department of Transport, effective immediately on Wednesday. This comes as no direct bailout is currently envisaged, according to National Treasury. Global rating agency Moody’s recently warned that Transnet could run out of money within three months. Moody’s also said that, although the government provided a R47 billion guarantee facility in December 2023, this funding has been fully exhausted. Transnet has indicated that it is not worried about the warning. It said it is confident in its ability to raise funding and meet its upcoming debt obligations and has put its residential property up for sale.
- Most fund managers surveyed by the Bank of America expect the JSE’s All-Share index to breach the 100,000 points mark in the next year, which could add R2 trillion to the bourse’s market value, with more runway for further growth due to the undervaluation of equities. The All-Share Index has rallied 10% so far this year, pushed higher by resources and industrial stocks. Resources stocks have surged 30% year-to-date, largely on the back of the higher gold price, while industrials are up nearly 13%.
- High interest rates are now overwhelmingly seen as a drag on South Africa’s recovery, according to a survey of local fund managers by Bank of America. A poll run between 2 and 8 May and released on Tuesday showed that 86% of respondents viewed current monetary policy as too tight, with most blaming politics for the squeeze. The South African Reserve Bank is set to announce its next interest rate decision on 29 May. The central bank’s benchmark repo rate is currently at 7.50%, and respondents see the repo rate bottoming out at 6.75%. The survey also noted that the pessimism is underpinned by a subdued growth outlook.
- Blue Label is considering spinning off Cell C as part of the group’s restructuring in a move that will see all four of South Africa’s largest telecom companies listing on the local bourse. News of the proposed restructuring sent Blue Label’s shares up 11.61% – the highest daily gain in nearly 10 years. Cell C had previously mooted listing on the bourse, but these moves had not succeeded. The current listed players are worth more than R500 billion on the JSE.
- Shares in Sasol surged more than 10% at one point on Tuesday as CEO Simon Baloyi detailed a corporate reset marked by aggressive debt reduction and a pared-back emission reduction budget. It will discontinue the recycling of fine coal to its gasifiers. The move cuts its emissions budget by up to R18 billion, much of which would flow towards paying down Sasol’s R71 billion debt pile, which overshadows its more than R50 billion market capitalisation.
- Investec, having reported pre-provision adjusted operating profit of more than R24 billion (£1bn) for the first time in its 50-year history, is ramping up growth initiatives in its anchor geographies, South Africa and the UK. It plans to expand its UK business into full-service corporate banking and double its private banking clients to 18,500 within five years. In South Africa, it’s targeting mid-sized corporates, aiming to triple its client base and reach 8% market share by 2030. Strong financials, rising deposits, and increased funds under management enabled a new R2.5 billion share buyback, bringing total buybacks since 2022 to nearly R10 billion.
- Nissan could be considering closing its Roslyn plant after a recent announcement that it planned to expand its ‘turnaround plan’ to include more plant closures and layoffs than previously envisaged, according to a source. The Pretoria plant, established in 1966 and employing 1,200 people, holds a storied place in local automotive history, having produced everything from the iconic Datsun bakkies of yesteryear to the more recent NP200, a popular compact utility vehicle whose production ceased last year.
- WeBuyCars is positioning itself to capitalise on the rapid rise of Chinese car brands locally. While German brands remain strong and established, the group said on Monday that Chinese entrants were gaining ground in the used car market, buoyed by competitive pricing, improving quality and stronger post-sale support. It noted that names such as Haval and Chery were popular when it came to second-hand cars.
- As at the time of writing, the rand was 0.5% stronger against the dollar, and the ALSI was 0.6% up for the week.
Sources: Dynasty, IOL Business, Business Report, BusinessLIVE, CNN, Bloomberg, Reuters, CNBC, NYT, Reuters, TechCentral, etc.
