Transnet Port Terminals
The government has announced its plans to navigate the new tariff regime imposed on South Africa by US President Donald Trump.
In a joint statement on Friday, the Ministers of International Relations and Cooperation and Trade, Industry, and Competitions, said this necessitated strategic responses to maintain and grow the country’s industrial base, as a crucial avenue to pursuing inclusive growth.
They said the government intends to negotiate favourable agreements, diversify and expand trade relations, and enhance regional trade collaboration by leveraging the African Continental Free Trade Area to bolster inter-Africa trade.
Other key focus areas will be on “value-added production” in support of industrial policy objectives, and also stimulating local growth by investing strategically in industries impacted by the tariffs.
The government also seeks to forge global alliances through “strategic partnerships” with other countries and enhance collaboration and influence in international trade negotiations.
“This reflects the national interest of strengthening global diplomatic and economic ties,” said Dirco minister, Ronald Lamola.
“South Africa’s tariff and industrial strategy is designed to support industrial development, employment growth, and economic resilience.
“By aligning these policies with the national interest, South Africa will ensure that its economy emerges stronger, more diversified, and resilient in the face of global trade complexities,” he said.
Lamola said the tariff implemented by the US administration will be effective from 9 April.
He said that as South Africa’s average tariff is 7.6%, they will need clarity on the basis for the 31% to be implemented by the US.
“It is important to note that products such as copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, and energy and energy products have been exempted from the reciprocal tariffs.
“Some of these materials are already key parts of the United States of America’s sourcing requirements.
“According to the United States Geological Survey, 97% of their chrome ore requirements come from South Africa, 6% of fluorspar import requirements and 24% of the United States manganese requirements.
“These reciprocal tariffs will not apply to products already facing Section 232 tariffs of 25% such as steel, aluminium, automobiles, and auto parts,” he said.
Minister Parks Tau noted that the reciprocal tariffs effectively nullify the preferences that Sub-Saharan African countries enjoy under the Africa Growth and Opportunity Act (AGOA).
“The sweeping tariff measures will affect several sectors of our economy, including the automotive industry, agriculture, processed food and beverage, chemical, metals, and other segments of manufacturing, with implications for jobs and growth.”
The Ministers said South Africa would continue building domestic supply resilience, reducing the cost of doing business and increasing the competitiveness of the economy.
“Further, South Africa will continue with efforts to diversify export markets as part of its resilience-building strategy.”
