US President Donald Trump.
Image: Peter Zay / AFP
While the South African economy is still processing the negative impact of the global tariffs unleashed by United States President Donald Trump, targeting numerous economies across the world, the discourse in South Africa has also touched on what would be Pretoria's way forward.
IOL reported on Thursday that Trump announced reciprocal tariffs for several countries, including 31% for certain South African goods imported into the US.
While announcing the wholesale tariffs on countries including the People's Republic of China, United Kingdom, Singapore, India, Japan, and South Korea, Trump remarked that "a lot of bad things" are going on in South Africa.
On Friday, Minister of International Relations and Cooperation, Ronald Lamola and Minister of Trade, Industry and Competition Parks Tau hosted a joint press conference in Midrand to outline South Africa's "strategic approach" in the wake of the US’s tariff regime.
Minister of Trade, Industry and Competition, Parks Tau, said South Africa should send a delegation to US.
Image: Supplied
Tau said it would not be advisable to hit the US with a round of retaliatory tariffs.
"The first thing is that, in our context, taking an approach that says we will impose reciprocal tariffs firstly without understanding how the US arrived at 31 percent, and then begin to respond without engaging with the US, would be counter productive. It also runs the risk of a race to the bottom, because everybody in the world is making different decisions.
"There is all sorts of knee-jerk reactions to the announcements made. I think it is a risky thing to do, to simply decide that we are now going to impose reciprocal tariffs. I think it is a race to the bottom. I think it would be ill-considered to simply just make a decision to impose reciprocal tariffs.
"In any case, our approach has always been, and we have announced this through the president (Cyril Ramaphosa) who has already said to the nation, we are going to engage with the US. We are going to send a delegation of government and other stakeholders, an official delegation to the US. Our approach is to engage, to find solutions and to resolve problems," he said.
Tau said government is not going to make public pronouncements before processing issues thoroughly, including undertaking due processes.
At the same briefing, Lamola said the wave of global trade tariffs unleashed by Trump effectively nullify the massive benefits under the Africa Growth and Opportunity Act (AGOA) for South Africa and other nations.
Minister of International Relations and Cooperation, Ronald Lamola.
Image: Itumeleng English / Independent Newspapers
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.
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.
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.
jonisayi.maromo@iol.co.za
IOL