Winde punts US investment in Western Cape and pushes to cut harsh Trump tariffs

Western Cape Premier Alan Winde is pitching the Western Cape as a great investment destination for the US, both to boost the province and to persuade Washington to reduce its harsh trade tariffs on South Africa.

Winde has just completed a trip to the US, where he met a wide range of government officials, congressional leaders and others to make the case for better trade and investment relations between the US and both the Western Cape and South Africa.

Among the possible US investments in the Western Cape that he discussed were a gas-to-energy plant at Saldanha Bay and a battery manufacturing facility.

He stressed that the Western Cape, in particular, had major commercial ties with the US: the US was the largest foreign investor in the province, its second-biggest trading partner and a major source of tourists.

“We’ve got to remain competitive, but those 30% tariffs don’t make our agricultural sectors competitive. So what does the US want from us? Well, give them something, and if they want to supply us with gas and invest in gas in our region, let’s do it, if that helps us get to better [tariff] rates,” he said.

Winde said he had discussed his trip beforehand with Trade, Industry and Competition Minister Parks Tau, who had instructed his team in Washington to update him on the state of trade negotiations.

In Washington, he had a long discussion with President Cyril Ramaphosa’s investment adviser, Alistair Ruiters, a former director-general of the Department of Trade and Industry, who is now South Africa’s chief trade negotiator with the US.

Winde called Ruiters “our greatest asset right now” and punted him for the vacant job of SA ambassador to the US — a post that Ruiters is increasingly being tipped to fill. He said he told Ruiters he was in the US to fight for the Western Cape, but also to ask how he could bolster SA’s case.

Winde suggested to Ruiters that the strategic importance of the US investing in a gas-to-energy plant at Saldanha Bay should be proposed in the negotiations with Washington.

Saldanha Steel plant

That energy could be used to power the power-peak generator at Atlantis and to fuel the Saldanha Steel plant. Winde noted that ArcelorMittal had mothballed the plant, and he had been trying for a long time to persuade the company to sell the plant if it didn’t want to operate it.

“A month and a half ago, I got a letter from the chairman to say they have now agreed to put it on the market.”

He said the province was interested because of the jobs the plant would create, but also it would be “a big energy gobbler”, which would enhance the attraction for the US of investing in gas-fired energy at Saldanha.

Gas, he said, would be a better alternative to coal for providing this energy, as it serves as a transition fuel to the long-term objective of renewable green hydrogen, which has a better carbon footprint than coal. “But the gas component is what the US is after.”

Winde also punted US investment in battery manufacturing in SA and elsewhere in sub-Saharan Africa, which possesses the lion’s share of the raw materials needed to make batteries for EVs, etc. The major sources for these minerals are South Africa and Democratic Republic of the Congo.

“But the manufacture happens in Korea and China. From a geopolitical point of view, it would make sense to have manufacturing here as well as elsewhere in sub-Saharan Africa, closer to the source. That should be a big part of our discussion with America and Europe.”

These US investments could help reduce SA’s US import tariffs of 30% — “the highest tariffs in sub-Saharan Africa” — which, Winde said, were making the Western Cape’s agricultural exports uncompetitive.

He said the Western Cape had exported R18.3-billion worth of agricultural products to the US in 2024, and these exports were growing by 2.66% a year. This represented 64% of South Africa's total agricultural exports to the US and 54% of agri-processed exports such as wine and fruit juices.

Citrus exports

He noted that citrus was a major component of the Western Cape’s exports to the US, and this business had taken 24 years to grow. “That’s how long it takes to build up relationships, value chains and markets. So when everybody says we’ll just diversify and find new markets, you can’t just do it, so we have to fight for a competitive tariff.”

Exports of catamarans and other yachts manufactured in the Western Cape have also been threatened by the 30% US tariffs, but Winde said he had pointed out to the US officials that 60% of the value of an average boat exported out of the Western Cape to the world consists of US technology and components.

“So it does not make financial sense for America to kill the yacht industry by nailing us with those tariffs.”

He said the US was the Western Cape’s second-biggest trade partner in the world, but also its biggest foreign direct investor, providing R29-billion worth of investment in 62 projects over the last 10 years, including big corporations like Amazon and Microsoft.

US tourism was also important for the Western Cape economy, and last year 163,000 tourists came from the US, the total growing at 16.45% a year.

Winde said he had visited Delta Airlines in Atlanta on his trip, and Delta had agreed to increase flights on its Atlanta-Cape Town route from three a week to five a week, and was prepared to increase this to daily flights. He said he would discuss this with Transport Minister Barbara Creecy.

He believed that if Delta flew daily to Cape Town, United Airlines would also want to increase to daily flights from New York to Cape Town, “and that is the best thing ever for the economy”.

Winde also attended the annual Climate Week in New York City, where he rebuked developed countries for reneging on their agreements to cut carbon emissions to net zero by 2050. The other regions of the world, including Africa, which he represented at the meeting, were paying the price, he said.

“So we [in the Western Cape] have had in the last 10 years a Day Zero drought. We’ve had massive fires in the Garden Route and fires every single year across the province. We’ve had two major one-in-a-hundred-year floods.

“And that’s cost us billions which are not budgeted for.”

Winde said he gave the same message to the G20 climate ministers at their meeting in Cape Town on Thursday, 16 October. DM