Source: APO – Report:
.
South Africa’s Response Measures to the US tariffs
Since the beginning of the 7th 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 ensure predictability in trade. However, even with these efforts, the US decided to impose a 30% unilateral tariff on South Africa. 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.
The unilateral tariffs have been implemented notwithstanding, South Africa’s submission of a comprehensive and ambitious Framework Deal in May 2025 aimed at addressing the US trade deficit, address tariffs, promote digital trade, enhance commercial relations, promote investment and eliminate non-tariff barriers to enhance mutually beneficial trade relations with the United States.
The 30% unilateral tariffs on foreign imports apply to various US trading partners which will be implemented from 12:01 am on 8 August 2025. The Executive order published by the United States clarifies that goods loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. eastern daylight time 8 August 2025, and entered for consumption, or withdrawn from warehouse for consumption, before 12:01 a.m. eastern daylight time on October 5, 2025, shall not be subject to such additional duty and shall instead remain subject to the 10% tariff.
The US is South Africa’s third biggest trading partner, with the European Union and China being the first and second largest trading partners. The US accounts for 7.5% of our global exports. Thus, we will continue to engage the US with a view to conclude a deal that advances the interests of both countries. South Africa seeks to conclude deals that promote value addition and industrialisation, rather than extractive relations that deprive the country of the ability to beneficiate our mineral wealth by mimicking extractive colonial era trade relations.
South Africa’s minimal 0.25% share of total US imports makes the 30% tariff on our country are inscrutable, especially when these same tariffs have been applied indiscriminately to all US trading partners globally. Moreover, South Africa poses no trade threat to the US economy nor its national security. The calculation of US-SA “trade deficit” ignores the substantial US trade surplus in services, as well as the complementary nature of the bilateral trade and investment relations between the two countries.
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.
Impact of the tariffs
The uncertainty of the new tariff line is already incorporated into economic projections. For example, various economists estimated that it may shave off 0,2% of South Africa’s economic growth. The reduction in growth from the 30% tariff depends on a number of factors, including our ability to find alternative markets. It should be noted, however, that 35% of SA exports remain exempted from the tariffs. All applicable exceptions covered in the previous US Executive Order are set to remain in force and these exceptions covers products such as copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, stainless steel scrap and energy and energy products.
Importantly, due to South Africa not enjoying a country exemption for Section 232 duties on steel and aluminium, South African companies have already adjusted to the Section 232 duties since 2018. However, the heightened policy uncertainty creates instability in trade and may have an impact on exports.
The new tariff regime implemented by the United States is a significant departure from a low-tariff environment. This policy shift, which affects not only South Africa but the entire world, has already led to higher tariffs than before, changing the landscape of global trade as we know it.
Response measures
- Continuation of negotiations with the US
South Africa is committed to a principled approach, and we will continue to use all available diplomatic channels to negotiate a mutually beneficial trade deal with the United States one that respects our national interests while advancing our long-standing partnership. Such a deal will be pursued in a pragmatic manner that preserves regional integration and the SACU common external tariff, noting that SACU accounts for 9% of our global exports and must be preserved.
The South African Government is working with industry to consider aspects of the Framework Deal that can be modified, in a manner that promotes predictability in trade.
- Implement an Economic Response Package which includes:
a.) The establishment of an Export Support Desk, which will 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. The contact details of the Export Support Desk have been published on the dtic website.
b.) Measures to assist companies to absorb the tariff and facilitate long-term resilience and growth strategies to protect jobs and productive capacity in South Africa. The details of these are being finalised and will be communicated shortly.
c.) Localisation Fund Support (LSF) stands ready to contribute to the national effort to support South African companies impacted by the imposition of 30% import tariffs by the United States. In collaboration with the dtic, IDC 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.
d.) To build resilience, we are working on an Export and Competitiveness Support Programme (ECSP), which will include a working capital facility and plant and equipment facility to address short to medium term needs across all industries.
e.) We are also working with the Department of Labour on measures to mitigate potential job losses, using existing instruments such as the UIF that can be adjusted to respond to the current challenges.
- Block exemption for exporters
The diversification of markets that will be required following the introduction of additional tariffs on South African goods may require exporters to coordinate their activities in relation to developing joint infrastructure for exports, sharing of market information and coordination of activities to achieve economies of scale and efficiencies that enable them to be competitive.
These activities may contravene the provision of the Competition Act. The Minister has following consultations with the Competition Commission, introduced a Block Exemption for Exporters to enable collaboration and coordination by competitors. The Block Exemption details the scope of application. A draft Block Exemption will be published by the end of the week so that the process can be concluded expeditiously.
- Diversification of markets
We have been strengthening trade and investment partnerships with various trade partners. These efforts are bearing fruits, targeting markets across Africa, as well as in Asia, Europe, Middle East, and Americas.
Our announcement on the Clean Trade and Investment Partnership with the European Union in March has unlocked a R90 Billion Investment Package that has been initially committed. This Clean Trade and Investment Partnership also aims to unlock new market access opportunities for South Africa, including the export of Sustainable Aviation Fuel (SAF) by Sasol and the exports of hybrids and Electric Vehicles.
While facing global trade challenges, South Africa is proactively building a more resilient agricultural sector. We’ve made significant progress in opening up vast new markets like China and Thailand, securing vital protocols for products like citrus and others. With China alone being a $200 billion market, we are confidently expanding our reach and creating new opportunities for our agricultural producers.
Our government has not been idle; we are proactively and collaboratively diversifying our trade portfolio. Under the coordinated leadership of the Presidency, DIRCO, and the dtic, we’re making significant inroads into new, high-growth markets across Asia and the Middle East, including the UAE, Qatar, and Saudi Arabia. These efforts are not only opening doors to new opportunities but also reinforcing our commitment to retaining the vital markets we already have. South Africa’s economic future is resilient, and we are working tirelessly to secure it.
We have also developed a number of Trade and Investment Packages with a number of countries, including Japan that aim to unlock new market access opportunities.
While the current measures present challenges, it also presents opportunities to build and accelerate the implementation of the AfCFTA and to develop new partnerships in markets that have remained untapped, including ASEAN and Türkiye.
– on behalf of Republic of South Africa: Department of International Relations and Cooperation.