South Africa finds itself in a right unusual muddle. On the First of August, today at writing United States President Donald Trump will impose his deadline on tariffs for countries Washington has traded with, including South Africa. Trump appears unwilling to lower or even fully withdraw the imposition of taxes on exported goods. The high tariffs could cause severe damage to South African businesses and the economy.
Trump said South Africa is among more than 180 countries that have a high trade balance with the US. South Africa is still waiting for feedback from the US on its trade offer as countries make their last-ditch attempts to soften the tariff blow. This week, Minister of Trade and Industry Parks Tau gave a little more insight into the offer on the table, including a R60 billion investment pledge in the US mining and recycling sectors. The deal, first tabled during President Cyril Ramaphosa’s visit to Washington in May, also carries the possibility of poultry and blueberry imports to SA from the US and a massive 10-year liquefied natural gas import deal. On his Truth account, Trump reiterated, “the August first deadline is the August first deadline – it stands strong and will not be extended”.
ActionSA and the Democratic Alliance (DA) said in the absence of any communication to assure domestic markets, they’re only left to assume there is no plan for how the Government of National Unity (GNU) will mitigate any economic fallout from the planned tariffs.
The Johannesburg Stock Exchange (JSE) is going to experience a shock treatment. That is, if President Cyril Ramaphosa doesn’t come up with a plan that would dissuade Trump from imposing his tariffs. The value of the Rand could easily plummet and possibly severely harm the dollar. Interestingly, R60 billion is being offered in investment back into the US. Who is going to carry out that investment if Trump agrees? Will it be the South African government or the country’s corporations? Is Trump going to offer incentives in return for the investment deals he is being offered? Will the Trump Administration finally give assent to the Africa Growth and Opportunity Act (AGOA)? Ramaphosa seems to be pushed up against a corner here. On the one hand, he has made promising concessions to Trump’s economic vision, but will Trump himself budge?
Trump has not indicated what move his administration will make as regards to Pretoria. It looks like Trump could impose the tariffs on SA regardless of what Ramaphosa and the GNU offer him. If Trump cuts out South Africa and vetoes Agoa then we may find ourselves heading for some unfortunate repercussions.
“The Department of Trade, Industry and Competition (DTIC) has announced a set of measures in response to the imminent 30% tariff hike on South African exports to the United States, which comes into effect on 1 August 2025. “These urgent interventions are part of the DTIC’s ongoing commitment to protecting jobs, preserving market access to the United States, and promoting export diversification to alternate markets in Africa, the European Union, Asia, Latin America, and other strategic partners,” Trade and Industry Minister Parks Tau said in a statement on Thursday night, 31 July. This comes hours after Tau told Radio 702 that South Africa was preparing a last-minute “enhanced” trade proposal in the hope of avoiding Trump’s punishing tariffs. Key among the interventions, Tau said, was the establishment of an export support desk, which would serve as a direct point of contact for companies affected by the US tariff hike.
“The desk will provide updates on developments and tailored advisory services to exporters on alternative destinations, guidance on market entry processes, insights into compliance requirements and linkages to South African Embassies and High Commissions abroad,” said Tau.
Trump’s tariffs may set the South African economy back, depending on the severity of the taxes imposed on our exports. However, when one door opens, there is a need to look for another that is open. South Africa may not be as large as the US, but as part of the Southern African Development Community (SADC), it is time for the country to develop its infrastructure within the bloc. As part of the African Union, the country is also a signatory to the African Continental Free Trade Area (AfCFTA) and, as such, needs to build sustainable bridges with other signatories. The DTIC and South Africa’s business chambers need to brace themselves for the impact of the shock of the imposition of Trump’s Tariffs. The ‘urgent interventions’ that Tau has said are in place would be Plan B, since Trump rejected Pretoria’s offer of investment in American industries, as mentioned earlier.
Building new bridges when others have burned should be a top priority. South Africa must look to increasing its ties to its trade partners in Africa, Europe, the Middle East and Asia now more than ever. Isolation is a luxury that the country can’t afford. South Africa must develop its manufacturing sector.
Article written by:
Yacoob Cassim
Journalist at Radio Al Ansaar
