By Lehlohonolo Lehana.
South Africa is finalising a comprehensive package that aims to protect businesses against the fallout from punitive United States (US) trade tariffs.
US President Donald Trump last week announced that imports from South Africa will be subjected to 30% duties — the highest in sub-Saharan Africa — among a slew of levies that will be imposed from 7 August as part of his efforts to reshape America’s relationships with its trading partners.
The move will affect about 30 000 jobs in South Africa, Simphiwe Hamilton, the trade department’s director-general, told the journalists at a briefing earlier today.
His boss Parks Tau said his department would be sharing “a set of more detailed proposals” on SA’s tariff response package with the Cabinet on Wednesday that “would elaborate on the structure of the support package”.
Tau and International Relations and Cooperation Minister Ronald Lamola held a joint briefing held in Ekurhuleni.
The US is South Africa’s third-largest trading partner (7.5% of total exports), with China being its second-largest trading partner (11%) and the EU its largest, with 17%.
Tau and Lamola said that their teams had been working frantically for months to secure a trade deal with the US to avert Trump’s punishing tariffs.
“Since the beginning of the seventh administration, South Africa embarked on a process to stabilise and enhance mutually beneficial trade and investment relations with the US. The aim has been to address long-standing bilateral issues of concern for both sides in ways that move the trade relations forward. South Africa has been engaging the US at various levels with a view to ensuring predictability in trade. However, even with these efforts, the US decided to impose a 30% unilateral tariff on South Africa,” said Lamola.
At a meeting in June, US representatives told Department of Trade, Industry and Competition officials that they needed to revise this proposal, in accordance with the Trump administration’s new template for US trade with sub-Saharan Africa, which they said would be shared “soon”.
On Monday, Tau revealed that this template, in fact, never arrived.
According to Tau, after waiting for the template, the department followed up, and the US then suggested that SA sign a confidentiality agreement that would “unlock the discussions”.
“We signed the confidentiality agreement. We did not get a signed confidentiality agreement on the other side,” he said.
Two days before Trump’s 1 August deadline, Pretoria asked the US for the trade template and confidentiality agreement. However, Tau said the feedback from America was to regard the template as a “red herring at this point”, and to put forward a trade offer for the US to respond to.
Tau said SA was told “that offer should not be a negotiating offer”.
“It’s a very difficult negotiating platform to enter into,” he added. “When you are in that situation, part of your reality is that you actually don’t know what tariff you’re going to get even after making that offer.”
The acting deputy director for export in the trade department, Willem van der Spuy, said producers, mostly from the Western Cape, had been requesting clarity on when the tariffs would take effect and what support measures were in place.
“The issue is to create resilience in our international trade environment. And through this support desk, we will add practical areas of cooperation. We will link them up with embassies, we will link them up with potential buyers, we will take the journey with them in terms of the trade barriers,” Van der Spuy said.
Lamola said the export desk would “provide updates, advisory services, guidance on market entry and linkages to South African embassies and high commissions”.
While the establishment of the Export Support Desk has been welcomed by some stakeholders, political opponents questioned its adequacy.
In his weekly newsletter, president Cyril Ramaphosa stressed that the US tariffs underscore the urgency of diversifying South Africa’s exports and reducing reliance on select markets. He said the two countries had historically maintained complementary trade relations, adding: “Our exports are inputs into US industries. They support the US industrial base.”
He cited citrus exports as an example: “They are counter-seasonal and don’t threaten US production. The US sector has been in decline due to factors unrelated to imports — such as disease and low yields. Our citrus fills that gap.”
South African firms also invest heavily in the US, including in mining, chemicals, pharmaceuticals and food, said Ramaphosa, adding that this makes the country the largest African investor in the US.