South Africa steadfast in negotiating US trade deal

The departments of trade, industry and competition, and international relations, say they will continue to use available diplomatic channels to negotiate a mutually beneficial trade deal with the US.

In a joint briefing on Monday in Germiston, minister of international relations Ronald Lamola said the South African government had been engaging the US at various levels with a view to ensure predictability in trade. However, the US decided to impose a 30% unilateral tariff on South Africa despite these efforts.

South Africa faces the highest rate in Sub-Saharan Africa, and from August 7 products exported to the US will have the 30% tariff. Lesotho and Zimbabwe were hit with a 15% tariff.

“It is unfortunate that this government's efforts in resetting the relationship with the US has been undermined by some actors within South African society,” Lamola said. 

He added that the unilateral tariffs have been implemented despite South Africa's submission of a comprehensive and ambitious Framework Deal in May, aimed at addressing the US trade deficit.

“The US is South Africa’s third-biggest trading partner, with the EU and China being the first and second-largest,” he said.

“South African exports do not compete with US producers and do not pose a threat to US industry. On the contrary, our exports are crucial inputs that support America's own industrial base. Our agriculture exports are even counter-seasonal, meaning they fill gaps in the US market, not replace domestic products.

“South Africa isn't just a trading partner — we're a major investor in the US, with our companies sustaining American jobs. Similarly, over 600 US companies in South Africa contribute to our industrial growth and create employment. Our goal is to preserve and grow these mutually beneficial relationships.”

Some of the measures taken by government was the establishment of an export support desk, which Lamola said would serve as a direct point of contact for companies affected by the US tariff hike. “The aim of this support measure is to support the diversification of export markets for increased resilience, and facilitate the entry into alternative markets for affected exporters.

“The desk will provide updates on developments and tailored advisory services to exporters on alternative destinations, guidance on market entry processes, insights into compliance requirements and linkages to South African embassies and high commissions abroad.” 

There were also measures to help companies absorb the tariff and facilitate long-term resilience and growth strategies to protect jobs and productive capacity in South Africa.

Lamola said the details of these measures were being finalised and would be communicated soon.

He added that the localisation support fund (LSF) stood ready to contribute to the national effort to support South African companies affected by the 30% tariffs.

“In collaboration with the department of trade, industry and competition, the Industrial Development Corporation and other agencies — LSF will issue an open call from firms operating in affected value chains, with the aim of providing targeted competitiveness and efficiency support.”

Lamola also said they were working with the department of labour on measures to mitigate potential job losses, using instruments within its entities that can be adjusted to respond to the new challenges.

SowetanLIVE