South Africa, US to resume trade talks as tariff deadline looms
South Africa will resume trade talks with the Trump administration on the sidelines of the US-Africa Business Summit next week, with less than a month to go before Washington’s reciprocal tariffs are set to come into effect.
The negotiating teams will aim to thrash out the details of South Africa’s proposed framework agreement, which includes ramping up liquid natural gas imports, a joint fund for the exploration of critical minerals and duty-free US quotas for the auto and steel industries. Officials first presented the measures to the Trump administration when President Cyril Ramaphosa visited Washington on May 21.
Discussions on the technical details of the accord have taken place and South Africa’s team will resume negotiations at the summit, according to people familiar with the talks who asked not to be identified because they’re not authorised to speak to the media. The meeting is scheduled to take place in the Angolan capital, Luanda, from June 22-25.
The South African trade department didn’t respond to a request for comment. The US State Department didn’t immediately respond to a request sent by email.
South Africa is behind countries including India and the UK in negotiating a trade deal with the US, making it unlikely that the parties will reach a deal by the July 9 deadline, when tariffs will triple from the current 10%. Africa’s most-industrialised nation is hedging its bets on the US accepting a proposal to maintain the duty at current levels until an agreement is concluded.
“Effectively what we have put forward tries to be a mitigating factor for July 9,” deputy director-general for trade, Xolelwa Mlumbi-Peter, told lawmakers in Cape Town last week.
What South Africa has proposed:
- The establishment of a joint fund for the exploration of critical minerals in South Africa
- A duty-free quota of 40 000 vehicles per annum for the auto industry and duty-free access for automotive components sourced from South Africa for production in the US
- A duty-free quota of 385-million kilograms of steel and 132-million kilograms of aluminium annually
- Increasing imports of LNG from the US to as much as 100 petajoules annually for 10 years, which may generate as much as $12-billion of trade over a decade.
Washington’s trade complaints against Pretoria span a range of industries from vehicles to citrus and meat, while differences between the two nations extend beyond trade.
President Donald Trump has spread the false conspiracy theory that White farmers have been subjected to a genocide in South Africa and that the authorities have seized their land. There have been no official land seizures in South Africa since apartheid ended in 1994.
The threat of higher US tariffs has also prompted the South African authorities to diversify its export markets, Mlumbi-Peter said last week.
“We have identified 22 critical markets that we need to diversify our exports to,” she said. “The export branch is working with the private sector to continue our diversification efforts so that we can build a greater resilience so that we are not too vulnerable in one market.”
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