The re-election of Donald Trump as US President will have implications for South Africa’s energy sector as his administration’s policies are likely to disrupt global fuel markets, reshape South Africa’s export landscape, and contribute to a surge in carbon emissions worldwide.

“Increased adoption of renewables, especially through locally controlled small-scale solar, would be the most effective response to market volatility anticipated under Trump’s policies,” says Andrew Lawrence, Senior Lecturer: African Energy Leadership Centre. “By expanding renewable energy capacity, South Africa could reduce its reliance on imported fuels, stimulate local industries and job creation, and build resilience against external economic shocks.”

Energy costs are a significant determinant of inflation, interest rates and growth rates. “By building a robust, green energy sector from within, South Africa can secure its energy security and climate resilience well into the future,” he says.

Economic impact of US tariffs

Trump’s ‘America First’ agenda, promising steep tariffs, would impact South Africa’s economy. Protectionist policies would increase the cost of capital for financing debt and reduce demand for South African exports. “Trump and the Republicans’ opposition to the African Growth and Opportunity Act (AGOA) and their general stance on Africa raise the risk that AGOA could be terminated, a move that could harm US-South Africa trade relations,” Lawrence says.

While economic volatility poses risks, it could reduce South Africa’s import costs and relieve inflationary pressures. “Additionally, a weaker dollar and higher US tariffs on China could redirect Chinese investment to South Africa,” Lawrence says.

Climate funding under threat

Trump withdrew the US from the Paris Agreement in 2017 and is expected to do so again, says Lawrence. “With substantial support from the fossil fuel industry, he has pledged to roll back regulations to encourage greater fossil fuel production and lower energy prices. He has also committed to repealing former US President Joe Biden’s Inflation Reduction Act (IRA), the primary US legislation promoting green industrial policy.”

These actions could undermine international climate funding, including support for South Africa’s own energy transition efforts. “Experts predict that ramped-up fossil fuel use under Trump’s policies could add as much as four billion tonnes of carbon emissions by 2030, causing over US$900 billion in global climate damages that would disproportionately affect low- and middle-income countries, including South Africa,” Lawrence says.

Collaboration with China

South Africa’s core energy priorities include expanding grid connectivity, but they could go further in promoting electric vehicles (EVs) and public transit, increasing energy storage, and advancing small-scale renewable energy generation. “South Africa’s most reliable path forward lies in self-reliance and strategic international partnerships. The country’s long-term stability and economic growth would benefit from the accelerated integration of renewable generation into the grid and the creation of mini-grids and off-grid solutions for rural areas. These steps are crucial for enhancing energy security and climate resilience and addressing critical national and regional security goals such as food and water security while reducing energy costs,” Lawrence says.

Collaboration on clean energy between the US and South Africa will likely be limited as the US is not a dominant player in global clean energy markets. By contrast, China holds strong positions in the wind and solar energy value chains, offering considerable potential for partnerships with South Africa, Lawrence says. “Although there is some bipartisan support in the US for promoting African growth and trade, Africa-China trade volumes are six times those with the US. Therefore, strengthening trade relations with China and expanding regional collaboration are likely to be more advantageous for South Africa’s energy transition,” he says.