South Africa’s leaders are in disagreement over the national budget, due next week, in a major test for the future of the country’s coalition government.

Minority parties in President Cyril Ramaphosa’s government unexpectedly rejected a draft budget last month. This draft proposed raising VAT to fill a 60 billion Rand ($3.3 billion) fiscal gap. This gap was created by President Donald Trump’s partial withdrawal of US funding for HIV/AIDS programs.

Members of the smaller parties in the coalition told the Financial Times that no agreement had yet been reached. This is despite Ramaphosa’s office stating on Monday, after an emergency cabinet meeting, that the Finance Minister and the Treasury were “preparing to finalize the budget and present it to parliament.”

A government official, speaking to the FT on condition of anonymity about internal discussions, said, “This is by no means a done deal.” They added, “Some parties will not accept any tax increases, but the reality is that there is no money.”

The budget impasse is growing in South Africa, which has been governed by a large coalition since July. This happened after Ramaphosa’s African National Congress (ANC) failed to secure an outright majority for the first time since the fall of the apartheid regime and partnered with nine other parties.

Songezo Zibi, leader of Rise Mzansi, one of the coalition partners, said, “The ANC was the majority party for 30 years, so it took it for granted that the budget would pass. But in countries where there is no single majority party, it is not that easy, and the ANC did not seem to understand that a budget impasse could paralyze a country.”

The main disagreement was over ANC Finance Minister Enoch Godongwana’s plan to raise VAT from 15% to 17%. This proposal was opposed by the Democratic Alliance (DA), the second-largest party in the coalition, and even some ANC ministers.

The DA, which advocates for the private sector, proposed closing the gap with a series of other measures. These include selling two major port concessions to the private sector and creating a cost-cutting task force similar to Elon Musk’s efforts in Washington.

DA leader John Steenhuisen, who is also Minister of Agriculture in Ramaphosa’s cabinet, told the FT on Wednesday, “If we don’t grapple with the hard realities facing the country, we will be stuck in a cycle of raising taxes we can no longer afford and taking on more debt.”

After Steenhuisen’s rejection of the initial budget, the ANC stated that it was critical to find money to cover salary increases for civil servants and “above-inflation increases in social grants, which will protect the most vulnerable from the rising cost of living.”

The party emphasized that South Africa’s fiscal policy should “support economic transformation and protect the poor while promoting inclusive growth.”

South Africa’s debt-to-GDP ratio has risen to approximately 75%, up from less than 24% in 2008.

The “we will fight if necessary” tension between Washington and Beijing is escalating. Following US Defense Secretary Pete Hegseth’s statement, “Those who want peace must prepare for war,” indicating their “readiness” for war with China, a statement came from the Chinese Ministry of Foreign Affairs.

The spokesperson for the Chinese Ministry of Foreign Affairs stated, “There are no winners in war.”

After the US imposed an additional 10% tariff on China, Chinese Foreign Ministry spokesperson Lin Jian stated, “If what the US wants is war, whether it’s a tariff war, a trade war, or any other kind of war, we are ready to fight to the end.” This sharp statement from China caused surprise, and Hegseth’s comments followed.

In a statement made today by the spokesperson for the Chinese Ministry of Foreign Affairs, it was emphasized that China is not in favor of war:

“The US must understand that China is NOT a reflection of the hegemonic US in the mirror. The US must stop looking at China-US relations with an outdated Cold War mentality. The US should no longer try to encircle or chase China in the name of strategic competition. No matter what kind of war it is, tariff war or trade war, cold war or hot war, it should not be fought, and there will be no winners.”

Immediately after US President Donald Trump’s 10% additional tariff on Chinese goods came into effect on Tuesday, Beijing announced its own retaliatory measures. China announced that it had increased import duties on a range of American agricultural and food products by 10%-15%. Beijing also placed twenty-five US firms under export and investment restrictions on national security grounds.

China’s latest retaliatory tariffs came after the extra 10% tariff threatened by US President Donald Trump last week came into effect at 05:01 AM Beijing time on March 4, leading to a cumulative 20% tariff. The Trump administration accused China of not taking action on illegal fentanyl in these latest tariffs.

Analysts believe that the mutual tariffs threaten to turn into a full-scale trade war between the two economic giants.

NATO countries are considering halting intelligence sharing with the United States. The Donald Trump administration’s positive stance toward Russia and the cut-off of military aid to Ukraine have led to “trust issues” within NATO.

According to Politico, NATO member states and security officials say that the actions of Trump and his administration could worsen the situation.

With the outbreak of the war in Ukraine, trust in Hungary had plummeted because of its stance on Russia, followed by Slovakia.

But now, according to five sources who spoke to Politico, the US shift toward Russia has prompted other NATO countries to consider how risky it is to share intelligence with Washington.

Trump’s policies serve Vladimir Putin’s goal of undermining NATO’s combat capability.

“We don’t agree on who the common enemy is, so people are going to be more hesitant to share information,” said Daniel Stanton, a former employee of CSIS, Canada’s foreign intelligence service.

The situation has been further complicated by Washington’s decision to halt intelligence sharing with Ukraine and ban allies from sharing American intelligence with Kyiv.

“There’s a lot of whispering in the corridors of NATO about the future of intelligence sharing within the alliance,” Julie Smith, who served as US ambassador to NATO under Joe Biden, told Politico.

Smith said she has heard concerns from some allies about whether Washington will continue to provide intelligence to the alliance.

But other members are also wary of sharing their own information with the United States, especially given some of the appointments in the new administration. For example, the new Director of National Intelligence, Tulsi Gabbard, has in the past been notable for her statements against the Kyiv government and has met with ousted Syrian President Bashar al-Assad.

Some officials told Politico that the new administration’s actions have not yet affected intelligence sharing but expressed concern that this could happen soon.

According to an unnamed former NATO official, such information sharing is largely bilateral and does not take place in all-member meetings.

“Of course, the situation has deteriorated because of the approach to Ukraine, but we still think that Trump has no real objections to NATO other than at the level of spending. That’s at least something,” the official said.