South Africa faces a new dilemma in diplomacy and economics after the Trump administration threatened secondary sanctions against countries doing business with Iran, consequences of which could extend far beyond limited trade with Tehran.
Although the direct impact on trade is expected to be minor, recent US moves may test South Africa's foreign policy stance and expose local financial institutions and businesses to the risk of falling under the jurisdiction of the US financial system.
On Monday, the Trump administration intensified its economic campaign against Tehran: US Treasury Secretary Scott Bessent announced possible new sanctions related to Iran, warning countries and companies that continue financial operations with Tehran about potential retaliation.
However, for South Africa, this new threat arises against the backdrop of existing economic pressure caused by a broader geopolitical crisis.
In March, the Department of Mineral Resources pointed to geopolitical tension related to the conflict between the US and Iran as one of the factors contributing to rising crude oil prices, which led to an increase of 20 cents per liter for gasoline and more than 60 cents for diesel fuel. The government also cautioned that disruptions in crude oil supplies through the Strait of Hormuz could exacerbate the pressure.
This economic vulnerability was previously noted by Minister of International Relations Ronald Lamola in Parliament on March 19. Lamola stated: 'The price South Africans are paying for the ongoing military actions in the Middle East is too high.' He warned that rising costs for energy and fertilizers could affect transport and food prices, noting that fertilizers account for about 35% of farmers' costs.
By June, Lamola again warned of broader economic consequences of the conflict, stating: 'All countries, especially developing ones, have felt the economic consequences of this war.' He called for negotiations and a cessation of hostilities, reflecting South Africa's general position on the need to maintain open diplomatic engagement even amid escalating tensions.
Gideon Chitanga, an analyst on international relations and politics, suggested that the latest US sanctions would likely have minimal direct impact on South Africa's trade with Iran but could put pressure on the country's diplomatic relations with other states. Chitanga noted that the Strait of Hormuz remains one of the biggest vulnerabilities for South Africa and other oil-importing nations, as disruptions affect energy prices, fertilizers, and logistics.
He emphasized: 'What we have seen is a trigger effect that has increased inflation not only in South Africa but also in other countries that heavily import oil through the straits. This has affected inflation growth, cost of living, and so on.' Chitanga added that primary and secondary sanctions would have minimal impact on trade but could create pressure on South Africa's political relations or diplomacy with other countries.
According to Chitanga, bilateral trade with Iran currently amounts to less than $25 million annually, with South Africa's imports estimated at approximately $3.7 million; however, this volume has already been declining due to US sanctions against Tehran. He concluded that the relatively small trade volume allows South Africa to redirect most of it elsewhere without significant economic damage.
Nevertheless, Chitanga believes the political consequences are far more significant, given South Africa's long-standing preference for dialogue over coercive diplomacy. He noted: 'Politics paints a different picture because South Africa prefers the tradition of its foreign policy course—open engagement with other countries. And the ANC government, in particular, strongly dislikes coercive diplomacy, no matter what, and the use of sanctions to resolve conflicts with other countries. I think this is where the Trump administration's dissatisfaction lies.'
Siseko Maposa, Director of Surgetower Associates Management Consultancy, stated that the direct impact of sanctions on South Africa's trade with Iran would likely be minimal, but the greater danger lies in the extraterritorial reach of these measures and their potential impact on local businesses and financial institutions.
Maposa warned: 'The real danger lies in the scope of these measures, which could subject South African banks and companies to severe penalties, including exclusion from the US dollar system, if they facilitate any prohibited Iranian trade.'
He pointed out that South Africa finds itself caught between its commitment to non-alignment and BRICS solidarity on one hand, and its deep dependence on the US financial system on the other. Maposa advised: 'The most reasonable strategy would be a policy of 'quiet pragmatism': maintaining public diplomatic support for Tehran while privately issuing strict recommendations to local businesses regarding compliance with US sanctions to avoid catastrophic financial consequences.'
Professor Andre Tomashhausen, an expert in international relations, presented a much more critical assessment of South Africa's relationship with Iran, arguing that the political ties themselves had already cost the country dearly. He stated: 'The ANC's obsession with Iran has already cost South Africa dearly, and future costs will increase significantly. The Trump administration is delivering on its promise—an economic war against Iran, punishing third (third-party) countries that continue to trade with and service Iranian enterprises.'
Tomashhausen also questioned whether this relationship brought any significant economic benefits to South Africa, noting: 'If there were any economic benefits for South Africa from its commitment to Iran, they were well hidden and limited to the private sector.'