The scaffolding of the postwar global order is creaking. Built to secure peace and prosperity after 1945, institutions such as the UN, the International Monetary Fund and the World Trade Organisation (WTO) once co-ordinated the ambitions of nations. Eight decades later, that multilateral architecture is buckling under the weight of protectionism and power shifts.
The G7 club of rich democracies has been slow to adjust to the world’s new balance of economic power. Emerging economies have resisted taking on greater responsibility and ageing institutions have grown irrelevant in the face of modern crises. The WTO still flies the flag of open trade. But fewer nations now salute it.
The WTO’s October forecasts expose an uneasy equilibrium. Global merchandise trade is now expected to grow at a higher 2.4% in 2025, lifted by emerging markets, steadier macro conditions and a surge in AI-related goods, a category that makes up just a 10th of world trade but leapt more than 20% in the first half of the year, accounting for nearly half of total trade growth. Yet this strength is somewhat synthetic, driven by firms rushing to ship goods ahead of tariff hikes rather than underlying demand alone.
The hangover will hit in 2026, with WTO trade growth expected to plunge to just 0.5%, strangled not by a single crisis but by tariffs, uncertainty and mistrust acting as silent nontariff barriers.
The heaviest blow will fall on the Global South. A 2025 International Chamber of Commerce study shows that if the WTO multilateral trading system is weakened, nonfuel exports could plunge up to 45%, with Brazil, India and China hardest hit. Foreign direct investment may drop 6%, and economic growth may shrink by a similar margin, hammering export-dependent economies. For developing nations, the fraying of multilateral trade rules is a tangible threat to growth, only partially softened by bilateral deals.
Complicating matters, the US has leant fully into its “America First” posture. On April 5, a 10% reciprocal tariff on all imports wiped out the duty-free benefits of the African Growth & Opportunity Act, which had granted sub-Saharan Africa about $10bn in duty-free access in 2023. The programme officially expired on September 30 after Congress failed to reauthorise it amid competing priorities. Combined with a 30% tariff on nearly two-thirds of South African exports, it underscores the fragility of the bilateral trade relationship.
The core challenge lies in Pretoria’s actively non-aligned foreign policy, seeking the financial rewards of Western markets while keeping a political foothold in the anti-imperial Brics alliance as a counterweight to US dominance. This tension has already stirred friction, prompting a US congressional review of bilateral ties and talk of sanctions.
This environment requires agile whole-of-government diplomacy. Trade negotiations can no longer be siloed. Regulatory, economic and political levers must move in concert.
For South Africa, this co-ordinated approach is vital to clearing hurdles such as biosecurity protocols that have long blocked US poultry and pork, provided overall health and safety standards are maintained, and to ensure that domestic reforms reinforce rather than undermine foreign trade ambitions. The next frontier is tariffs, with the US pressing Pretoria to narrow disparities created by the Southern African Development Community-EU trade pact.
Structural hurdles remain. While South Africa has stable institutions, an independent judiciary and mature financial markets, foreign firms still face challenges in meeting the ownership requirements of broad-based BEE.
Meanwhile, US tariffs and shifting geopolitical pressures create a climate where commercial interests can be upended with little warning. The department of trade, industry & competition notes that South Africa is the 43rd-largest US export destination, accounting for just 0.25% of total imports, while the US market absorbs roughly 4% of South Africa’s agricultural exports, though the value has doubled since 2018.
Domestic improvements, from logistics and labour to empowerment policies, are no longer purely internal matters; they are instruments of diplomacy. To expand its share of global trade, South Africa must combine domestic reform with innovative strategies. Digital trade-tracing systems can improve supply chain transparency and reliability, while targeted sector-specific trade fairs can showcase South Africa’s strengths to key global markets. Moreover, expanding the network of foreign economic representatives could create new opportunities for bilateral trade and investment.
Securing these deals requires trade and market intelligence supported by credible domestic reforms. Demonstrating compliance and capacity serves as a tangible assurance to investors and trading partners.
By aligning internal reform with outward-looking diplomacy, South Africa can safeguard market access, attract investment and stake its claim in a world where multilateral rules are splintering and bilateral agreements increasingly dictate the game. A world where, as WTO director-general Ngozi Okonjo-Iweala warned upon assuming office in 2021, it is time to “forget business as usual”.
Packirisamy is chief economist at Momentum Investments
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