Illustrative Image: President Cyril Ramaphosa (Photo: Frennie Shivambu / Gallo Images) | Taiwanese Flag | US Flag | Microchip (Image: Freepik) 
There is a consistent genre of books that seems to do well when someone is looking for something for their father or grandfather for Christmas. It’s not yet another book about the South African War (I’ll believe books are really dead when that Deneys Reitz book finally goes out of print) or an update on our latest political scandal.
Rather it’s a book about how humans have been able to develop economically. I completely understand the fascination, it’s really a book about how we became richer that points to a possible future.
It is amazing how important trade is to all of this. Every piece of work you do is essentially a trade in return for money; we spend our entire lives literally trading our time and skills for something else.
When I was younger, during the 1990s, as the Cold War ended, it seemed to me that, with China, rising trade was literally going to make the world greater than it had ever been.
Now, as President Cyril Ramaphosa put it so nicely at the United Nations General Assembly on Monday, “trade is being used as a weapon” by various countries.
When he was speaking, I think he might have been thinking about the Trump administration, and particularly the economic pain that is coming our way as a result of their policies. But almost while he was speaking it was in fact Taiwan that was proving his point. And, unfortunately, inflicting pain on us while it was doing it.
Taiwan decided earlier this week that it would institute a curb on the export of its top microchips to us.
The impact of this can be hard to assess. But, as MyBroadband’s Jan Vermeulen explained on the Heritage Day edition of
style="font-weight: 400;">The Money Show, if it wanted to, Taiwan could inflict serious pain.
It’s not just that it could say certain chips cannot be used in cars that are made in South Africa – it could go much further. He says Taiwan could even decide to say to a company like Apple that it cannot sell products that include a certain class of microchips to South Africa.
While the headline would no doubt be that the latest I-cult-phone would not be available here, in fact there would be a very real effect. It would make our economy and our goods, and more importantly our people, much less competitive than the rest of the world.
Now, you would only want to inflict this kind of pain on a country if it was really irritating you.
And it seems obvious that this is a response to Pretoria’s decision to force Taiwan’s trade mission (its highest office in South Africa since we recognise Beijing and not Taipei) to move from Pretoria to Johannesburg.
This is a hugely powerful weapon. Which might be why Taiwan has had a rethink and rescinded the ban.
I did wonder if perhaps someone senior had realised that the net impact of this would be to push us further into the arms of China, which is completely the opposite of what Taiwan wants.
And no matter how you look at it, the fact that Taiwan and the US are using trade as a weapon seems to be strengthening China.
As Bloomberg reported this week, China seems to be “flooding the world with cheap exports”. Basically, it’s looking for other markets to replace the US, especially because it can’t just switch off its production.
The evidence of this is all around us.
On Tuesday, the Chinese ambassador to South Africa, Wu Peng, said they were asking Chinese car manufacturers to open factories here. He reckons Chinese companies have invested $11-billion in South Africa.
For Taiwan, microchips are a wonderful weapon; they have built a huge lead in the manufacturing and design of something the global economy needs.
/file/dailymaverick/wp-content/uploads/2025/09/microchips.jpg "Source: Statista/Forbes")
But it also realises that it needs to be used very carefully.
In a way it’s like an atom bomb. Just by having it you are more powerful – the threat is almost as useful as the weapon itself.
And you can use it only once.
If Taiwan had kept its ban against us it would have nothing left to threaten us with. It might be much better to keep the threat than use it. And in fact this might have been the whole point, to just concentrate a few minds in Tshwane on the possible consequences of their decisions.
This is so much more strategic than the US, where President Donald Trump has basically just used this weapon against everybody.
And because so many countries need trade they are rushing into the arms of China.
Ramaphosa is right about trade being used as a weapon. But he might have mentioned that it can also backfire. And I think it’s doing that in the case of the US.
In the meantime, none of the Christmas books about this period is going to sell that well. Because, while trade makes us richer, using it as a weapon makes us poorer. DM