SA and the US have begun discussions aimed at reducing a looming 30% tariff on SA exports, President Cyril Ramaphosa said.
This is as Pretoria scrambles to shield businesses and labour from the high tariff before August 1 when the levies are due to be implemented. Ramaphosa confirmed on Wednesday diplomatic engagements are under way in an effort to de-escalate tensions and preserve market access for SA producers from the heightened trade restrictions.
“Following engagements that we have had with them [US] after their letter that the 30% tariff is subject to modification pending the conclusion of negotiations between our two countries. Those negotiations have commenced,” Ramaphosa said during the budget debate vote on the presidency.
“We have already seen how just the mere news of the intention to impose tariffs has dampened the ability of a number of exporters from our country to the US, and we’ve seen how some companies have had their exports declining by up to 80%.”
Pretoria is also concerned the new levies could deter investment and accelerate capital flight, particularly at a time when SA is seeking to boost industrial output and reduce its persistent current account deficit.
Business Day previously reported vehicle exports to the US collapsed almost 82% in the first half of the year on the back of the Trump administration’s unilateral tariffs.
Business Leadership SA CEO Busi Mavuso has also urged the government to implement mitigation measures to cushion the impact of the tariffs and to protect jobs.
“We continue to work to diversify our export markets and to build a more resilient domestic economy. And in this regard, we call on our producers who export goods to be actively involved in diversifying their own market and to engage and enlist government assistance,” Ramaphosa said.
International relations minister Ronald Lamola said during the budget vote debate his department and the department of trade, industry & competition are conducting discussions with the US to repair trade relations with the US.
Trump announced in a recent letter addressed to Ramaphosa that most goods from SA would be subject to a 30% tariff from August 1.
This effectively nullified the African Growth and Opportunity Act (Agoa), which guarantees duty-free access to the US for most goods and services from Africa, including macadamia nuts from SA. Other hard-hit local exports include vehicles and auto parts, citrus products and wine.
“Our foreign policy is an extension of our domestic policy. Every day we work harder to make our contribution to advance the national interest of our people,” Lamola said.
“It is not only SA facing increased tariffs from the US. The challenges with the US are in both the Global South and the Global North... They [other countries] all have ambassadors in the US, but still face challenges because of the unpredictable nature of today’s Washington.
“Our negotiations are currently being co-ordinated by Dirco (department of international relations & cooperation and the DTIC (department of trade, industry & competition to resolve the trade challenges.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.