The largest labour federations and business have slammed a proposed 30% blanket tariff by former US President Donald Trump on SA exports, warning it could devastate an already fragile economy grappling with high unemployment and sluggish growth.
The Congress of SA Trade Unions (Cosatu), SA Federation of Trade Unions (Saftu) and the National Council of Trade Unions (Nactu) have raised alarm about the economic and social consequences of the move, which threatens sectors such as automotive manufacturing, agriculture, steel, chemicals and textiles.
Many of these industries have a footprint in the Eastern Cape, a major export gateway to global markets.
“We are extremely disappointed with US President Donald Trump’s announcement,” the Nelson Mandela Bay Business Chamber said in a statement.
“This is a direct blow to local exporters who manufacture products according to world-class standards and employ thousands of people,” the chamber’s CEO, Denise van Huyssteen, said.
“Nelson Mandela Bay will be disproportionately [affected] due to our high reliance on the automotive and agriculture sectors.”
The chamber warned that original equipment manufacturers (OEMs) and component exporters would face immediate disruption, threatening thousands of jobs and putting SA at a competitive disadvantage to regional and global rivals such as Morocco, Japan and South Korea.
“Manufacturing is currently under immense pressure brought about by the electricity, logistics and municipal infrastructure challenges of the past few years, as well as the influx of cheap imports into the market,” Huyssteen said.
“In terms of the automotive industry, cheaper imported vehicles are making inroads into the market, with consumers opting for these over purchasing from companies that manufacture vehicles locally.
“In fact, five out of the top 10 selling vehicles in the SA market are from companies that do not assemble vehicles locally. These factors with the potential of reduced export volumes to the US, make it even more difficult for the industry to be sustainable.”
Labour groups echoed the concern, citing economic and political risks.
“Cosatu is deeply concerned … the impact of the impending tariff is already being felt in the Eastern Cape with 900 jobs on the line at Goodyear SA and Mercedes-Benz ‘temporarily’ shutting down vehicle production,” said Zanele Sabela, spokesperson for the country’s largest labour federation.
She said the union supported government efforts to renegotiate a trade deal and called for urgent support via the UIF’s Temporary Employer/Employee Relief Scheme (Ters) to soften the blow for workers.
Saftu, the country’s second-largest federation, called the tariff “economic bullying” and a form of “trade war against the poor”. General secretary Zwelinzima Vavi said: “This unilateral and protectionist threat will hurt workers and small producers across the Global South. A 30% tariff could drive many of them over the edge, leading to mass retrenchments and closures.”
Vavi called for urgent national dialogue, accelerated trade diversification, and a rejection of SA’s current export-led and austerity-driven model in favour of a UN sustainable development goals-aligned strategy.
The US and SA signed a trade and investment framework agreement in 2012 that amended the agreement originally signed in 1999. Trade and investment framework agreements provide strategic frameworks and principles for dialogue on trade and investment issues between the US and the other parties. This is in addition to SA’s beneficiary status of preferential access through the African Growth & Opportunity Act (Agoa).
The new tariff regime, which comes into effect on August 1, nullifies the benefits of Agoa.
Business Day previously reported that the SA government was seeking to persuade the US through diplomatic channels to reconsider the steep hike.
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