(Bloomberg) -- President Donald Trump said the US would stop sending aid to South Africa over its land expropriation policies, sparking a selloff in the rand.
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“The United States won’t stand for it, we will act,” Trump said in a Sunday evening post on Truth Social. “Also, I will be cutting off all future funding to South Africa until a full investigation of this situation has been completed!”
Trump’s comments come less than two weeks after South African President Cyril Ramaphosa signed a new law making it easier for the state to expropriate land, subject to equitable compensation paid. The African National Congress, the largest political party in South Africa, has pushed to make it easier for the state to take land in an effort to address racially skewed land-ownership patterns dating back to colonial and White-minority rule.
The South African rand slid 2% against the dollar in Asian trading. Emerging-market currencies were also weighed by Trump following through with imposing tariffs on countries including China and Mexico.
The US sent more than $8 billion in bilateral aid to South Africa over the last two decades, according to a 2023 report from the Congressional Research Service, the nonpartisan office that supplies legislative policy information and analysis to Congress. Much of those funds went to fighting HIV/AIDS and other development projects, CRS said.
Trump has threatened South Africa with economic punishments before. The country is the ‘S’ in the BRICS bloc of nations, which Trump in December threatened with a 100% tariff if the group moved away from using the US dollar.
South Africa holds the chairmanship of the Group of 20 this year and Trump, as US president, would be expected to attend. His top billionaire backer, Elon Musk, was born in the country.
--With assistance from Matthew Burgess.
(Updates currency moves in fourth paragraph and details on US aid to South Africa in fifth paragraph.)
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