All channels of communication remain open to engage with the US, President Cyril Ramaphosa writes in his weekly newsletter, published days after President Donald Trump confirmed that reciprocal tariffs of 30% would be implemented on South African goods from August 7.

“Our foremost priority is protecting our export industries.

“We will continue to engage the US in an attempt to preserve market access for our products,” Ramaphosa writes, while highlighting that South Africa’s trade relations have historically been complementary in nature.

“South African exports do not compete with US producers and do not pose a threat to US industry,” he asserts, arguing that US consumers receive choice and cost benefits.

“By way of example, citrus production is counter-seasonal and does not pose a threat to US production.

“Furthermore, production by US companies has been on the decline for a number of years as the US sector grapples with low yields, a citrus greening disease and other factors unrelated to competition from imports.

“Imports from South Africa, the world’s second largest citrus exporter, have filled a gap and contributed to stable supply and prices for US consumers.”

Nevertheless, Ramaphosa acknowledges that the international trading system is changing, and that besides continuing its talks with its second largest trading partner to find a “mutually beneficial” resolution, government will assist exporters to “aggressively explore alternative markets”.

“[We] have established an Export Support Desk to assist affected producers.

“We will in due course be announcing the modalities of a support package for companies, producers and workers that have been rendered vulnerable by the US tariffs.

“This intervention will also play a key role in guiding industries looking to expand into new markets in the rest of Africa, Asia, the Middle East and markets we already have trade agreements with,” Ramaphosa writes.

TRADE CRISIS COMMITTEE?

Business Leadership South Africa CEO Busisiwe Mavuso describes the Export Support Desk as a welcome first step. But writing in her own weekly newsletter, she also emphasises that swift implementation of broader measures will be critical, especially for the farming sector and manufacturers in the Eastern Cape.

Mavuso proposes that a crisis committee, consisting of business leaders and government officials from key departments, including the National Treasury, be established to ensure rapid information flow and coordinated efforts.

“I encourage the president to establish a Trade Crisis Committee that brings together business leaders and key government officials to jointly chart a path forward,” she writes, saying it could be modelled on committees set up to deal with the electricity and logistics crises.

“We already have proven crisis response tools that were developed for Covid-19 and the 2021 KwaZulu-Natal unrest.

“These can be adapted for our current trade challenges.

“Temporary loan schemes and employment support programmes will be essential to prevent a jobs catastrophe as factories face closure,” she argues.

Ramaphosa, meanwhile, says government plans to scale-up trade missions into new markets and the National Exporter Development Programme, which aims to grow the pool of export-ready companies. 
 
Emphasis, over the longer term, would also be given to  strengthening regional value chains and using the African Continental Free Trade Area to expand trade into Africa.

“Reducing over-dependence on certain markets is a strategic imperative to build the resilience of our economy,” the President adds.