The threat of the US implementing reciprocal tariffs for its trading partners, including SA, risks further straining the relationship between the two countries and is likely to hinder SA’s exports to the US, Busisiwe Mavuso, the CEO of Business Leadership SA (BLSA) said.
US President Donald Trump did not specifically name SA as one of the countries on which tariffs would be imposed. However, market watchers are expecting SA to be affected because Trump’s plans include imposing a 25% tariff on all steel and aluminium imports.
“The US is one of SA’s largest trade partners, dominated by exports from SA to the US. Steel and aluminium account for about 8.5% of what we export to the US, so the 25% tariff will put pressure on those volumes, though they account for 0.3% of all our exports,” Mavuso says in the BLSA weekly newsletter.
“The trade balance favours SA and supports many jobs, especially through high value-added manufactured goods. Our respective private sectors have close relationships with over 600 American companies active here,” Mavuso says.
“As organised business, the relationship with the US is top of mind, with jobs and the economy at the centre of our concerns. We are working toward an approach that aims to protect the interests of companies in both countries. But we must also keep our wider international relations in perspective, including many fast-growing markets that provide opportunities for our businesses.”
As organised business, the relationship with the US is top of mind, with jobs and the economy at the centre of our concerns.
— Busisiwe Mavuso, CEO of Business Leadership SA
The relationship between SA and the US has come under strain within the first month of the Trump administration following a series of pressure points under the Biden administration, including SA taking US-ally Israel to the International Court of Justice over its war with Gaza and the perceived closeness of SA with China and Russia.
The latest upset came after Trump signed an executive order halting funding to SA, citing racial discrimination against white Afrikaners and SA’s land policies stemming from the Expropriation Act. Since the signing of the order, Pretoria has been on a drive to repair relations with the US while maintaining its sovereignty.
This has been followed by a request by four Republican congressmen for the US to remove SA as a beneficiary of the African Growth and Opportunity Act (Agoa), accusing it of undermining American interests globally. Republican congressmen Andrew Ogles, Tom Tiffany, Joe Wilson and Don Bacon said in a letter to Trump, dated February 11, repeated false allegations that SA was committing human rights violations.
“We would also suggest that you consider suspending diplomatic ties unless that government is prepared to engage constructively with our own,” the letter reads.
Trump’s threat might create a delicate balancing act for SA where it needs to juggle economic stability alongside its pursuit of national interests on the global stage. Repairing relations with the US therefore is crucial for SA.
The potential removal of SA from Agoa or even its entire scrapping would be a painful blow and threaten millions of jobs across Africa
— Matthew Parks, Cosatu parliamentary spokesperson
Data from the US Trade Representative shows US total goods trade with SA was $20.5bn in 2024. US goods exports to SA in 2024 was $5.8bn, down 18.3% ($1.3bn) from 2023. US goods imports from SA in 2024 were $14.7bn, up 4.9% ($679.4m) from 2023. The US goods trade deficit with SA was $8.8bn in 2024, a 29% increase ($2.0bn) over 2023.
Agoa provides SA with duty-free access to US markets. It facilitated more than $3bn worth of SA’s exports in 2022 alone, mainly motor vehicles, fruit and wine.
Cosatu, the country’s largest trade federation, says any reciprocal tariffs that could be imposed by Trump on SA will lead to huge job losses, deepening the country’s unemployment crisis.
“It will be important for the US government to engage SA’s government to ensure the pending country eligibility and tariff review is based upon facts and takes into consideration SA’s and the continent’s severe socioeconomic and developmental challenges, and how Agoa and its renewal could be utilised to support our economic development and regional integration. The potential removal of SA from Agoa or even its entire scrapping would be a painful blow and threaten millions of jobs across Africa,” Cosatu’s Matthew Parks says.
“We will continue to support government’s efforts to develop strong relationships with all nations. This must be accompanied by ramped-up support to boost exports and diversify trade with not only key trading partners in America, Europe, China, Japan and India, but, in particular, Southern Africa and Africa, where our destiny lays.”
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