LDN - Business

EU announces a $5 billion investment in South Africa as the tariffs war with Trump escalates

[March 14, 2025] By GERALD IMRAY

CAPE TOWN, South Africa (AP) — European Union leaders announced 4.7 billion euros ($5.1 billion) in investments in South Africa on Thursday to support green energy and vaccine production, and agreed to start talks on new trade deals with Africa's most advanced economy.

The announcement came at the first bilateral summit between the bloc and the African country in seven years.

European Commission President Ursula von der Leyen, European Council President António Costa and South African President Cyril Ramaphosa spoke of the need to boost international cooperation during the meeting, held at the South African leader’s Cape Town office.

Their message stood in contrast to the Trump administration’s confrontational foreign policy and trade tariffs.

Meanwhile, U.S. President Donald Trump said in a social media post that he would impose a 200% tariff on European wine, Champagne and spirits in an escalation of a trade war with the EU.

“We will defend our interests,” von der Leyen said in response to Trump's latest threat. "We’ve said it and we’ve shown it, but at the same time I also want to emphasize that we are open for negotiations.”

Von der Leyen also said that Europe was looking to deepen its trade relationship with South Africa, already the EU’s largest trading partner in sub-Saharan Africa.

“We want to strengthen and diversify our supply chains but we want to do it in cooperation with you,” she said, sitting next to Ramaphosa.

She described it as a new chapter in their relations and referred to South Africa as a reliable partner. “On both sides there’s high respect for stability, predictability and reliability," she said.

Ramaphosa said the summit came at a time of increasing global uncertainty. Both the EU and South Africa have felt the impact of Trump's first months of his second term.

South Africa has been singled out for sanctions by the Trump administration over domestic and foreign policies that the U.S. leader has cast as anti-American — a reference to South Africa launching a case at the top U.N. court accusing U.S. ally Israel of genocide in the war in Gaza, as well as to South Africa's ties with China and Iran.

[to top of second column]

South Africa's President Cyril Ramaphosa, center, shares a light moment with European Union Council President Antonio Costa, left, and Ursula von der Leyen, the European Commission President, ahead of the eighth EU-South Africa summit in Cape Town, South Africa, Thursday, March 13, 2025. (AP Photo/Nardus Engelbrecht)

Trump issued an executive order last month cutting all U.S. funding to South Africa, accusing it of a human rights violation against a white minority group in the country, and of supporting some “bad actors” in the world, such as the Palestinian militant group Hamas and Iran.

Von der Leyen's visit also reemphasized the EU's support for South Africa's presidency of the Group of 20 leading rich and developing nations this year, another area where the United States has criticized South Africa while boycotting some early G20 meetings.

South Africa hopes to use its leadership of the group to make progress on help for poor countries, especially on debt relief and more financing to mitigate the impact of climate change.

U.S. Secretary of State Marco Rubio dismissed some of those priorities for the G20 and skipped a foreign ministers meeting of the group in South Africa last month. He also said that he wouldn't attend the main G20 summit in Johannesburg in November, indicating that the U.S. would give little attention to attempts at international cooperation through the bloc, which includes 19 of the world's major economies, the EU and the African Union.

The EU said that the vast majority of the new investment in South Africa — $4.7 billion out of the $5.1 billion — would be to help South Africa transition from its coal-based economy to greener energy supplies.

That new pledge came a week after the U.S. withdrew from an agreement to give funding to South Africa and two other developing nations to help them transition to clean energy sources that was seen as a possible blueprint for more deals to reduce carbon emissions across the world. The EU has also pledged money to that Just Energy Transition Partnership and said that it's still committed to the program.

“We know that others are withdrawing so we want to be very clear with our support," von der Leyen said. "We are doubling down and we are here to stay.”

Back to top