South Africa outlines response measures to counter US tariffs

The South African government has reaffirmed its commitment to continued negotiations with the U.S. aimed at securing a new trade deal. In the meantime, it is fast-tracking a support package for affected sectors.

According to estimates by South Africa's central bank, the tariffs could lead to the loss of about 100,000 jobs across various industries, with some sectors facing more acute challenges than others.

"We're going to start feeling it immediately. We already have some of our customers that have found stock of macadamias elsewhere, which we were targeting and hoping that we're going to still supply them this year. But they've already found other sources elsewhere where they don't have these huge tariffs. The U.S. has historically been a third of our customer base. So we need to go and find alternative customers. What's sad is [that] this customer base has built up over 20 or 30 years, and that's all gone to pieces now. The reality is [that] they still want to buy from us, but 30-percent tariffs is just unaffordable for them to buy at those sorts of levels," said Pieter van der Westhuizen, owner of Empire Nuts, a South African nut export company.

In response, the government decided to implement an Economic Response Package, which includes the establishment of an Export Support Desk, which will serve as a direct point of contact for companies affected by the U.S. tariff hike.

"The South African government is working with industry to consider aspects of the Framework Deal that can be modified in a manner that promotes predictability in trade, implement an Economic Response Package, which includes the establishment of an Export Support Desk, which will serve as a direct point of contact for companies affected by the U.S. tariffs," said Ronald Lamola, South African Minister of International Relations and Cooperation, at a press conference in Johannesburg on Monday.

A central pillar of the strategy is export diversification. South African officials are actively engaging with alternative markets to offset the losses in the U.S. One major opportunity lies in strengthening trade ties with China.

"China made an announcement at FOCAC (Forum on China-Africa Cooperation) this year that in fact, [it] will reduce [tariffs] to 0 percent for all African countries but one. And we took the opportunity to engage with the Chinese to say, what does this mean? How do we actually implement it. And this is a few weeks ago. They said, 'you need to sign an agreement. So, there's a China-Africa economic partnership agreement. You either sign the China-Africa economic partnership agreement or some form of free trade agreement, so that you are able to unlock this'," said Parks Tau, South African Minister of Trade, Industry and Competition, at the press conference.

In June, China announced that it will expand zero-tariff treatment to all 53 African countries with which it maintains diplomatic ties. This came after it granted zero-tariff treatment on 100 percent of product categories to all least developed countries with which it has diplomatic relations, including 33 African countries, starting from Dec 1, 2024.

Business leaders are calling for a more precise and data-driven approach in exploring new market opportunities.

"I do feel we need to be more targeted in our approach. We've got to be empirical, and 'empirical' means that we've got to have the best business intelligence and resources and research at our fingertips. And I don't feel we've done that successfully as a country. So businesses can work with government and alongside government in identifying both the correct set of data and how we apply that data and how we use business intelligence to become a lot more precise and targeted in the opportunities," said Stavros Nicolaou, senior executive for Aspen Pharmacare Group, a South African multinational pharmaceutical company.