SA’s trade team is mounting a last-ditch campaign ahead of Friday’s deadline to head off a punishing 30% blanket tariff on exports to the US while bound by a nondisclosure agreement that cloaks every twist of the talks.
Trade, industry & competition minister Parks Tau and Mcebisi Jonas, special envoy to the US, have deployed a blend of deal-making and diplomatic signalling aimed at resetting bilateral terms before Friday’s deadline to stave off the higher duties.
A new 30% tariff on SA exports comes into effect on August 1 unless a trade accord is struck. Beyond billions in potential export revenue, the showdown touches on geopolitics and supply chain security.
In a statement late on Tuesday, Tau said a reset of relations with the US before August 1 was inevitable.
“The intersection of geopolitical, domestic and trade issues best defines the current impasse between SA and the US, and a reset is unavoidable,” he said, stressing that SA had no intention of decoupling from the US and had refrained from imposing reciprocal tariffs of its own.
Binding commitments
Under the remedial package, which largely confirms much of Business Day’s reporting over the past few months, Tau said Pretoria had agreed to a “condition precedent” suite of binding trade and investment commitments.
Key features of SA’s trade proposal to the US include:
- Importing 75-100 petajoules of liquefied natural gas for 10 years, unlocking $12bn.
- Agricultural market access by simplifying US poultry exports under the 2016 tariff rate quota and unlocking about $91m in trade. In addition, readiness to open market access for blueberries subject to protocols.
- SA firms committed to invest $3.3bn in US industries such as mining and metals recycling, while both governments agreed to pursue joint investment in critical minerals, pharmaceuticals and agri-machinery.
- Exemption of specific sectors from reciprocal tariffs to preserve supply chains, for example ship building, counter-seasonal agriculture trade, exports from MSMEs of less than $1m per annum.
“We remain committed to the cause as we await substantive feedback from our US counterparts on the final status of our framework deal,” Tau said.
Zane Dangor, director-general in the international relations & co-operation department, said SA had bound itself to a nondisclosure agreement with the US as part of trade negotiations.
“SA is under a nondisclosure agreement with the US until the negotiations are complete,” Dangor said on Tuesday at the Kgalema Motlanthe Foundation’s winter seminar.
“The US is of the view that we are not ambitious enough. There are no guarantees in this process,” he said.
Complementing Tau’s effort to lock down technical wins, Jonas — who was appointed by President Cyril Ramaphosa after the expulsion of former SA ambassador to the US Ebrahim Rasool — said SA should abandon ideological posturing and recalibrate its trade relations with Washington.
“SA’s relationship with the US is not merely transactional but based on a long partnership rooted in shared values of democracy, justice and progress,” Jonas said as he delivered a keynote address at the seminar.
“In the immediate term, SA is engaged in negotiations with the US to reach a solution to the tariff impasse that benefits both parties.
“More generally, we remain committed to negotiating through the immediate relational crisis. There is also the opportunity for collaboration on issues of mutual interest and concern, such as negotiating lasting solutions in the major conflict zones in the world.”
He cautioned against domestic political actors exploiting international tensions for short-term gain, arguing disinformation and internal division were undermining the country’s credibility abroad.
“Foreign policy cannot be outsourced to factional interests or ideological cliques,” he said.
“We must not allow our foreign policy to be captured by ideological cliques, partisan political factions, cabals of businesspeople with their own commercial agendas, or foreign powers exerting pressure and seeking to extort us.”
He said that diversifying export markets to Asia, the Middle East andLatin America, while deepening commercial ties with traditional partners in North America and Europe, was essential to insulating the economy from geopolitical shocks.
“Increased protectionism threatens an abrupt end to market access, including the future of Agoa and the spectre of the EU’s CBAM [carbon border adjustment mechanism] tariffs.
“Added to this is the long-term scaling down of overseas development aid and other forms of concessional support from the US and Europe,” Jonas said.
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