South Africa’s coalition government is on a shaky basis, with sharp divisions between its two largest political parties – the African National Assembly (ANC) and the Democratic Union (DA) – taking place with a key vote on the national budget.

The central right-wing DA voted against the key part of the budget after rejecting the increase in VAT and demanding a cut in spending in all government departments.

The ANC positioned itself as a left-wing party, refusing to succumb to what it calls DA’s demand for a “sustaining budget.”

It proves its political mind by winning the support of a series of smaller parties, both inside and outside the government, to win the fiscal framework through 194 votes.

The DA filed a challenge to vote in court, saying it was “procedurally flawed” and its top leadership will meet later to decide whether to stay in what South Africans call the Government of National Unity (GNU).

Professor William Gumede, a scholar at the School of Governance at the University of Witt, Johannesburg, told the BBC it is not clear whether the DA will withdraw from the government at this stage.

Professor Gumede said: “It will ask itself whether it is a critical point or should it wait – at least until the court case is concluded.”

The Alliance Government was formed less than a year ago since the ANC first came to power at the end of Nelson Mandela’s 1994 when the white fine rule ended.

South Africa’s business sector lobbies bipartisans into the coalition, viewing it as the best option to ensure economic stability.

However, DA spokesman Willie Aucamp accused ANC of committing “serious violations” and said the party “crossed a line in the sand” and DA spokesman Willie Aucamp accused DA of being involved no longer certain.

DA federal president Helen Zille said the party will consider all its options rather than rushing to get into trouble.

Zille added: “We know there is a need to compromise in the league. You can’t get all of that. But ANC can’t get all of it, either, they refuse, point to blanks, share power.”

The ANC took the same difficult position with the chief whip of parliament Mdumiseni Ntuli, accusing the DA of breaking up with GNU’s partners.

“The DA is a member, or a member,” Ntuli said.

He added: “I don’t know what will happen to them now, but GNU still exists.”

Vincent Magwenya, a spokesman for President Cyril Ramaphosa, also threw his gloves at the Avenue (DA), saying: “You can’t be part of the government that is against the budget.”

DA finds himself voting with two of South Africa’s largest, most populist, opposition parties – former President Jacob Zuma’s Umkhonto Wesizwe (MK) party and Julius Malema’s Economic Freedom Fighter (EFF).

Advocate the nationalization of key economic sectors, these two political parties are impeccable enemies of pro-enterprise DA.

But these three parties unite against VAT, believing that it will hit the poor.

As DA leader John Steenhuisen said, “ANC lost contact with the people and if they bought their own groceries or filled their own tanks, they would know how expensive life has been.”

But the ANC believes that the increase in VAT – 0.5% this year and 0.5% next year – is to increase revenue and provide public services such as health and education.

Crucially, the Inkatha Freedom Party (IFP) voted on the ANC, which showed the end of the alliance with the DA formed in the election to disengage Ramaphosa’s party from power.

Actiona – A small opposition party who left the DA – helped the ANC vote.

It said it had reached an agreement with the ANC that would abandon the VAT increase while exploring another way to boost revenue for the government.

“The adoption of the report on the fiscal framework yesterday (Wednesday) is only a step in the multi-stage budget process before the final budget is approved,” Actiona said in a statement.

Professor Gumede said the ANC would find it difficult to convince the public to pay more taxes when public services collapse.

“The optics don’t look good for ANC,” he told the BBC.

“DA takes the budget as an opportunity to have a significant impact and shows that it is poor.”

The dispute beyond the budget is the latest sign of sharp differences between the two parties, and has challenged three other legislation in the court, including the Land Acquisition Act.

This law is one of the problems that lead to U.S. President Donald Trump’s administration cuts aid to South Africa.

The Trump administration has now imposed a 30% tariff on all South African imports, which could be a huge blow to its already struggling economy.

“They’re having some bad things happening in South Africa. You know, we’re paying them billions of dollars, we cut the money because there’s a lot of bad things happening in South Africa,” the U.S. president said before continuing to name other countries.

Ramaphosa’s office condemned the new tariffs as “punitive” in a statement, saying they could “become a barrier to trade and common prosperity.”

But for many South Africans, tariffs say the two largest parties need to resolve their differences and work together – or when the unemployment rate has exceeded 30%, it is possible to see the country fall into a deeper economic crisis.