United States President Donald Trump.
Image: Erin Schaff / Getty Images / AFP
Minister of International Relations and Cooperation Ronald Lamola on Friday said the wave of global trade tariffs unleashed by United States President Donald Trump effectively nullify the massive benefits under the Africa Growth and Opportunity Act (AGOA).
IOL reported on Thursday that while Trump's announcement of sweeping reciprocal tariffs was framed as a move towards fair trade, the action throws a significant wrench into the gears of global supply chains and presents a particularly complex challenge for South Africa.
Addressing a joint media briefing with Minister of Trade, Industry and Competition, Parks Tau in Midrand, Lamola said the AGOA benefits have been nullified, save for some sectors.
"The reciprocal tariffs effectively nullify the preferences that Sub-Saharan Africa countries enjoy under the Africa Growth and Opportunity Act (AGOA). The sweeping tariff measures will affect several sectors of our economy, including automotive industry, agriculture , processed food and beverage, chemical, metals, and other segments of manufacturing, with implications for jobs and growth," said Lamola.
Minister of International Relations and Cooperation, Ronald Lamola.
Image: File
He said the United States represented 7.45 % of South Africa’s total exports in 2024. On the other hand, South Africa accounted for only 0.4% of US total imports.
"As such, South Africa does not constitute a threat to US and where there is a trade imbalance in favor of South Africa, it is mainly on agriculture products which are counter-cyclical and on minerals which are inputs in US industries," said Lamola.
He said South Africa will continue building domestic supply resilience, reducing cost of doing business and increasing competitiveness of its economy.
"Further, South Africa will continue with efforts to diversify export markets as part of its resilience building strategy. The significant market access opportunities both through trade agreements and through strategic partnerships with countries across the globe present huge opportunities for our exports. The recently concluded Africa Continental Free Trade Area (AfCFTA) remains untapped, beyond the Southern Africa Development Community (SADC)," said Lamola.
Furthermore, Lamola said South Africa enjoys preferential market access through the Southern Africa Customs Union, SADC, SADC-EU Economic Partnership Agreement (EPA), SACU+Mozambique-UK EPA, the European Free Trade Association (EFTA), MERCUSUR (that includes Argentina, Brazil, Paraguay and Uruguay) and Japan Generalised System of Preferences.
In addition, Lamola said government is strengthening relations with countries in Asia and the Middle East to open new market access opportunities.
"Some of these efforts are bearing fruit with new market access opportunities for our agriculture products," he said.
Lamola highlighted that the new tariff regime arising from the decision by the US have been directed not only to South Africa, but the entire world.
jonisayi.maromo@iol.co.za
IOL
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