Trade, Industry and Competition Minister Parks Tau says a reset in South Africa’s trade relations with the US is unavoidable, but has also reiterated the country’s stance that negotiations remain the best tool for dealing with the current impasse.

Tau made the statement only days before the August 1 deadline for the imposition of a 30% ‘reciprocal tariff’ on those South African goods exported to the US that are not specifically exempted, or which are subjected to other tariffs that have been imposed on automotives, steel, aluminium and copper.

“The intersection of geopolitical, domestic and trade issues best defines the current impasse between South Africa and the United States, and a reset is unavoidable,” the statement reads, while stressing that South Africa had no intention of decoupling from the US and had refrained from imposing reciprocal tariffs of its own.

Tau again listed the main features of South Africa’s ‘mutually beneficial’ framework proposal made to the US during President Cyril Ramaphosa’s high-profile visit to Washington DC in May, which included:

• Importing 750 to 100 PJ of liquefied natural gas for a 10-year period, which would “unlock” $12-billion;
• Improving America’s agricultural market access by simplifying US poultry exports under the 2016 tariff-rate quota to unlock about $91-million in trade, while being ready to open market access for blueberries subject to necessary protocols;
• A commitment by South African firms to invest $3.3-billion in US industries such as mining and metals recycling, while agreeing to pursue joint investments in critical minerals, pharmaceuticals, and agri-machinery; and
• Exempting specific sectors from reciprocal tariffs to preserve supply-chains, such as shipbuilding, counter-seasonal agriculture trade, and exports from small enterprises with yearly revenue of less than $1-million. 

However, he also noted that South Africa was not the only country seeking a deal with the US, which was attempting to finalise negotiations with some 185 countries by August 1.

“As the Department of Trade, Industry and Competition, we have been in a period of intense negotiations with the United States.

“We have signed a condition precedent document and have readied our inputs for entry into the template which is to follow from the US.

“Despite the challenges that have been presented by this period, we have put our best foot forward, bringing together the subject specialists within our ranks that have dug deep to ensure that our country is adequately prepared for a number of potential scenarios,” Tau’s statement adds.

In planning for various scenarios, the department had set up a support desk for affected firms and was working with other government departments on a response plan.

The response package focuses on demand-side interventions for the impacted industries, including strategies to diversify export markets.