25 US states back South Africa as Eskom goes from zero to hero

JOHANNESBURG – South Africa has received an unexpected boost from the United States as 25 states challenge the Trump administration over tariffs imposed under Section 301, while Eskom’s performance continues to improve after years of severe electricity problems.

The developments come at a critical time for South Africa.

The country is trying to protect its access to the US market while rebuilding confidence in its electricity system and positioning the economy for stronger growth.

The latest developments offer two very different forms of relief: trade protection from an unexpected legal challenge in the US and improving electricity performance at home.

25 US states challenge Trump’s tariffs

The biggest international development involves 25 US states taking legal action against the Trump administration over Section 301 tariffs imposed on 60 countries.

The development is significant for South Africa because Pretoria has been seeking an exemption from new US tariffs following investigations concerning forced labour.

The legal challenge could potentially affect the broader tariff environment facing South African exporters.

According to the report, the states argue that the tariffs imposed under Section 301 are unlawful.

That puts the dispute on a much larger footing than South Africa’s own negotiations with Washington.

Why the US market matters to South Africa

The United States is an important trading partner for South Africa.

A change in tariff policy can therefore have consequences for South African exporters competing in the American market.

Higher tariffs can make South African products more expensive for American buyers.

That can reduce competitiveness, squeeze exporters’ margins and potentially discourage new investment aimed at the US market.

For industries that rely heavily on exports, the difference between preferential access and punitive tariffs can be substantial.

The legal challenge could change the equation

South Africa’s request for an exemption remains an important part of the country’s trade strategy.

But the lawsuit involving 25 US states could create another pathway through which tariff policy is challenged.

If the tariffs are ultimately found unlawful, the implications could extend well beyond South Africa.

The case could affect the legal foundation of the administration’s tariff strategy and potentially alter the trading environment for multiple countries.

However, the outcome remains uncertain.

The legal challenge should therefore be viewed as a potential benefit for South Africa rather than a guaranteed tariff victory.

The rand gets some relief

The tariff development came as the rand strengthened slightly against major currencies.

The rand was trading at around R16.36 to the US dollar on 5 August 2026, while it was around R22.01 against the pound and R18.87 against the euro.

The currency was supported by a weaker US dollar and a sharp decline in oil prices.

Oil prices dropped by approximately 5%, while markets also reacted positively to comments suggesting that a diplomatic solution could emerge from the Middle East crisis.

US Treasury Secretary Scott Bessent reportedly indicated that the Strait of Hormuz could reopen as early as Tuesday or Wednesday.

Global markets remain important

The rand remains particularly sensitive to global developments.

When there is uncertainty around war, oil supply, US monetary policy or global trade, emerging-market currencies can experience significant volatility.

South Africa is therefore affected by events far beyond its borders.

The latest improvement in the rand demonstrates how quickly market sentiment can change when geopolitical risks ease.

Markets are also waiting for US labour-market data, which could influence expectations around future Federal Reserve interest-rate decisions.

Eskom’s remarkable turnaround

While international developments provide South Africa with some relief, the country is also seeing a major change in one of its most important domestic institutions.

Eskom’s operational performance has improved significantly since André de Ruyter left the utility and Dan Marokane took over as chief executive.

The utility has moved from being synonymous with severe load-shedding and operational instability towards a period of substantially better performance.

BusinessTech described this shift as Eskom going from “zero to hero”, highlighting the improvement in service and efficiency under Marokane.

From load shedding crisis to improved reliability

South Africa’s electricity crisis was one of the biggest constraints on economic growth.

Years of load shedding disrupted businesses, damaged productivity and increased operating costs.

Companies were forced to invest in backup generators, batteries and alternative power supplies.

Households also faced repeated interruptions to electricity supply.

The improvement at Eskom therefore has implications far beyond the utility itself.

Reliable electricity reduces the need for expensive backup power and gives businesses greater confidence to plan production.

Why Eskom’s improvement matters to business

Electricity is an input into almost every part of the South African economy.

Mining companies require power for extraction, crushing, processing and pumping.

Manufacturers need reliable electricity to operate machinery and production lines.

Retailers require electricity for refrigeration, lighting and logistics systems.

Technology companies and data centres require increasingly large quantities of reliable power.

When Eskom performs better, the potential economic benefits spread throughout the value chain.

The Dan Marokane effect

Marokane’s leadership represents a different phase for Eskom.

The utility’s challenge is no longer simply to prevent the grid from collapsing.

It must also improve operational efficiency, maintain its generation fleet and ensure that the electricity system can support future economic growth.

That means Eskom has to keep improving while South Africa simultaneously transforms the structure of its electricity market.

The turnaround therefore needs to be measured over a longer period.

A few strong months are encouraging, but sustainable performance requires consistent generation availability, effective maintenance and sound financial management.

South Africa’s electricity challenge is not over

Despite Eskom’s improved performance, the country’s energy challenge has not disappeared.

South Africa still needs substantial investment in:

• Electricity generation.
• Transmission networks.
• Distribution infrastructure.
• Renewable energy.
• Battery storage.
• Grid modernisation.

The electricity system is also undergoing a structural transformation as more private generation enters the market.

That means Eskom must increasingly operate within a more competitive and decentralised energy environment.

Two developments that could support growth

The US tariff dispute and Eskom’s improving performance may appear unrelated.

But they both affect one of South Africa’s biggest economic priorities: competitiveness.

Lower trade barriers can help South African companies access international markets.

More reliable electricity can help those same companies produce goods and services more efficiently.

Together, those factors can improve the environment for investment.

Exporters still face uncertainty

Despite the potential relief from the US legal challenge, South African exporters should not assume that the tariff issue has been resolved.

The country still needs to engage Washington directly and protect its commercial interests.

Companies exposed to the American market should continue monitoring tariff developments closely.

The legal challenge involving the 25 states could become an important development, but its eventual impact depends on the outcome of the court process and the response from the Trump administration.

Eskom must maintain the momentum

For Eskom, the challenge is equally clear.

The utility needs to prove that its improved performance is sustainable.

That means maintaining generation availability while controlling costs and improving the reliability of its infrastructure.

The real measure of the turnaround will not simply be whether load shedding stays away for a few months.

It will be whether Eskom can deliver reliable electricity consistently over several years.

A better outlook for South Africa?

The combination of improving electricity performance, a more stable rand and a potentially favourable development in the US tariff dispute provides some positive news for South Africa.

But none of these developments guarantees stronger economic growth.

South Africa still faces structural challenges including unemployment, weak infrastructure, logistics constraints, municipal failures and slow economic growth.

The opportunity is to use periods of improved stability to address those deeper problems.

The bottom line

The latest developments provide South Africa with two unexpected reasons for optimism.

In the United States, 25 states are challenging the Trump administration’s Section 301 tariffs, potentially opening another front in the global dispute over US trade policy.

At home, Eskom is showing signs of a significant operational turnaround after years of being one of the country’s biggest economic constraints.

The two stories have a common lesson.

South Africa’s economic future depends heavily on its ability to remain competitive — both by selling to global markets and producing efficiently at home.

The tariff battle is far from over.

Neither is Eskom’s turnaround.

But for a country that has spent years dealing with trade uncertainty and an electricity crisis, both developments offer a welcome change in direction.