The full implications for South Africa of US President Donald Trump’s untargeted trade and industrial policies are not yet fully known. They are unlikely to be pain-free, however.

Besides for the automotive sector, some pain relief could arise should the administration begin taking a more targeted approach. One that could possibly emerge after the current reciprocal-tariffs pause, during which the US may grasp the full extent of the self-inflicted damage its proposed sledgehammer approach is likely to cause, with very little upside potential.

To be sure, it would require nerves of steel and/or massive incentives for any real-economy business to commit to a so-called “reshoring” investment, given the haphazard nature of the announcements and the subsequent flipflops. These have eroded all certainty, which along with confidence is critical for progressing any investment from concept to bankability.

The industrial strategy being pursued, meanwhile, appears to discount America’s incredible prowess in the areas of AI, services and research and development (including research undertaken at the very universities against which Trump has declared an anti-woke war). Instead, it places a premium on heavy industries where the US has few obvious competitive or comparative advantages; ones that are set to be eroded even further by a migration policy that is likely to raise labour costs in an economy were unemployment is low.

What the turmoil has done, though, is open up space for South Africa to consider not only how best to mitigate the tariff pain, but also to conceive industrial and trade strategies of its own. This space began opening well ahead of Trump 2.0, as policymakers and voters grew increasingly wary of the hands-off approach that had gained such hegemony in the post-Cold War era.

The challenge now is to make sensible choices. This is easier said than done, but developments across the Atlantic should certainly give those with hugely muscular trade and industrial ambitions pause. South Africa’s incredibly weak fiscal position and growth trajectory should also act as important guardrails, given that trade protection has implications for affordability and industrial support has implications for already burdened taxpayers.

Nevertheless, there are areas where South Africa has comparative and competitive advantages that could be leveraged through the skilful application of policy. In a recent opinion article, Trade, Industry and Competition Minister Parks Tau put his finger on two of these: the green transition and critical minerals mining and processing.

By offering the policy certainty needed to underpin a massive scaling up of solar and wind electrification, security of demand can be created to spur investments into the manufacturing of components and systems for wind, solar PV and battery plants, and spin-off industries such as hydrogen, electric cars and data centres.

Key thought leadership is contained in the recently publish South African Renewable Energy Masterplan, but much still hinges on government’s energy policy stance. There is much uncertainty here, however, with South Africa’s energy policy outlook murkier than it has been for some time.