What can President Ramaphosa offer the White House in high-stakes US trade talks?
Image: SihleMlambo/IOL
By Thabile Nkunjana
On May 14, 2025, the Presidency office declared that President Ramaphosa would be travelling to the US for a working visit from May 19 to May 22. He is joined by John Steenhuisen, Minister of Agriculture; Parks Tau, Minister of Trade, Industry, and Competition; Ronald Lamola, Minister of International Relations and Cooperation; and Khumbudzo Ntshavheni, Minister at the Presidency.
This comes after a string of topics that President Trump and his administration have brought up, including the conflict between Russia and Ukraine, the case against Israel in the International Court of Justice, and most recently, the allegations of "persecution" of white farmers that resulted in the migration of 49 Afrikaners to the United States.
To mend the misinformation about South Africa that has caused misconceptions and to re-establish diplomatic relations between Pretoria and the White House, President Ramaphosa recently called Trump, and he is now heading to the US.
What message about agricultural trade should the president convey at the White House now that he is travelling to the US?
Based on trade data, South Africa is more economically dependent on the US than the US is on South Africa. For instance, in 2024, South Africa's total exports to the world were worth R2 trillion, with the U.S. accounting for R150.0 billion or 7%, the second-largest market after China. However, according to trade map data, South Africa only contributed 0.3% or R106.5bn of the R37.8trln in US exports to the world.
Regarding the agricultural industry, South Africa exported R9.8bn worth of agricultural products to the US in 2024, a marginal increase from R9.1bn in2023. This amounts to 4% of the country's overall agricultural exports in 2024.
This increase complements South Africa's agribusiness endeavours to broaden its global reach, including the US market, and create jobs, thereby supporting the country's job profile in the sector, transforming the economy, and contributing to the overall NDP 2030 strategy.
Targeting the US market, the agriculture sector has spent billions of rand on infrastructure, research and others. Many South African farmers would have severe financial setbacks and employment losses, and export revenue would be seriously threatened in the medium-to short-term operations, if trade relations between the two countries deteriorate further.
With many young and emerging orchards aimed at the US market, Western Cape farmers have contributed to a discernible increase in the amount of land under citrus cultivation in the province over the years. These investments go beyond trade, which is the focus of most of the analyses done to estimate the possible effects on South Africa of losing AGOA.
In terms of commodities, exports, and job creation, the Western Cape will be severely impacted at the provincial level if AGOA is terminated or if tariffs are raised by almost 30% after July 10.
For example, the Western Cape was responsible for 55% of agricultural exports to the US in 2022, with Mpumalanga (15%), Gauteng (10%), Eastern Cape (7%), and KZN (6%), following closely behind.
As of 2024, the Western Cape is once again by far the greatest employer in the agricultural sector and the largest AGOA beneficiary from the agricultural sector in South Africa. With KwaZulu Natal, Mpumalanga, the Eastern Cape, the Northen Cape, and Limpopo all having many rural areas that would be affected negatively by any changes in trade with the US should things go south, the Western Cape comfortably accounts for roughly 20% of jobs within the agricultural sector in the country.
A select few products dominated the US market, despite South Africa exporting hundreds of agricultural products to the rest of the world. Oranges, Mandarins, macadamia nuts, wine, ice cream, sugar, dried grapes, apple juice, peaches, and grapefruit juice were among them.
The reality is that President Ramaphosa and his delegation are not travelling to the US on a clean slate. But from a political perspective, he has the expertise and experience to do so, and he has clearly stated the country's neutrality on several international geopolitical developments that are probably going to come up in the discussions. He is likely to have to deal with this before discussing trade and economic matters.
South Africa might need to make a proposal after Qatar, the United Arab Emirates, and the United Kingdom made some significant promises to the US about trade and investment in recent days.
Trump has stated unequivocally that he wants trade with countries that trade with the US to be reciprocal. As a result, the delegation to the US ought to get ready to compromise on trade.
The US will probably demand that some of its agricultural products be imported into South Africa, as the agricultural sector has benefited noticeable from AGOA. This will be challenging due to phytosanitary regulations that have been a problem, particularly for livestock or animal products.
If all regulatory requirements are fulfilled, compromises can be made for certain products, particularly those that are counter seasonal. Additionally, South African farmers do not receive the same level of support as American farmers, which has ramifications for the entire sector.
Tariffs are likely the lower hanging fruit. Depending on the product, US farmers currently face tariffs in South Africa ranging from 0% to 17%. The President might perhaps be able to accommodate Trump's trade demands by lowering these tariffs to about 10%.
Mr Thabile Nkunjana is a senior economist under the Trade Research Unit at the National Agricultural Marketing Council
Image: LinkedIn
* Thabile Nkunjana is a senior economist under the Trade Research Unit at the National Agricultural Marketing Council.
** He writes on his personal capacity, and does not, necessarily express views of IOL or Independent Media.
Visit: www.businessreport.co.za
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
TimesLIVE
44 minutes ago
- TimesLIVE
Zelensky wins EU, Nato backing as he seeks place at Trump-Putin talks
Ukrainian President Volodymyr Zelensky won diplomatic backing from Europe and the Nato alliance on Sunday ahead of a Russia-US summit this week where Kyiv fears Russian President Vladimir Putin and US President Donald Trump may try to dictate terms for ending the war. Trump, who for weeks had been threatening new sanctions against Russia for failing to halt the war, announced instead on Friday he would meet Putin on August 15 in Alaska. A White House official said Trump is open to Zelensky attending but preparations are under way for only a bilateral meeting. Russian strikes injured at least 12 people in Ukraine's Zaporizhzhia region, the country's foreign affairs ministry said on Sunday. Responding to the strike, Zelensky said: 'That is why sanctions are needed, pressure is needed.' The Kremlin leader last week ruled out meeting Zelensky, saying conditions for such an encounter were 'unfortunately still far' from being met. Trump said a potential deal would involve 'some swapping of territories to the betterment of the two (sides)", compounding Ukrainian fears that it may face pressure to surrender land. Zelensky said any decisions taken without Ukraine will be 'stillborn' and unworkable. On Saturday the leaders of Britain, France, Germany, Italy, Poland, Finland and the European Commission said any diplomatic solution must protect the security interests of Ukraine and Europe. 'The US has the power to force Russia to negotiate seriously,' EU foreign policy chief Kaja Kallas said on Sunday. 'Any deal between the US and Russia must have Ukraine and the EU included for it is a matter of Ukraine's and the whole of Europe's security.' EU foreign ministers will meet on Monday to discuss next steps, she said. Nato secretary-general Mark Rutte told US network ABC News Friday's summit 'will be about testing Putin, how serious he is on bringing the terrible war to an end'. He said: 'It will be, of course, about security guarantees, but also about the absolute need to acknowledge Ukraine decides on its own future, that Ukraine has to be a sovereign nation, deciding on its own geopolitical future.' Russia holds nearly a fifth of the country.
The Citizen
an hour ago
- The Citizen
Diplomatic coup in offing?
The president assumed the low-belly crouch that in the animal jungle signals deference, even submissiveness. President Cyril Ramaphosa may yet pull off a diplomatic coup. He has signalled that the ANC is willing to compromise. Perhaps even grovel. Not with the US, naturally. No, the olive branch is being extended to the South African Communist Party (SACP). Speaking this week at the SACP's national congress, the president assumed the low-belly crouch that in the animal jungle signals deference, even submissiveness. The ANC, he said, fully recognised the SACP's autonomy and acknowledged that its members who also belonged to the ANC were 'full members of our movement'. But, he added, those rights came with obligations. This petty, factional sideshow is instructive. It reveals much about Ramaphosa's – and the ANC's – priorities at this moment of national crisis. Their attention is not on the wrecking ball heading South Africa's way. Admittedly, Ramaphosa has not been entirely idle. On Thursday – the very day the devastating 30% tariffs kicked in – he telephoned President Donald Trump. It would, of course, be wonderful if the mercurial Trump had a change of heart in response to his tête-à-tête with Ramaphosa. That's wishful thinking. Just last week, he made his feelings clear: he's unlikely to attend November's G20 summit in Johannesburg – where Ramaphosa is supposed to hand over the presidency to him – citing as reason Pretoria's 'very bad policies'. It's these policies, far more than the trade deficit, that lie at the heart of the standoff. Washington's message has been clear for months, relayed repeatedly to our foreign and trade ministries. Initially, discreetly by the DA delegation that visited Washington in March, then publicly by the Afrikaner civic organisations that followed. ALSO READ: National Dialogue will go ahead despite withdrawal of foundations, Ramaphosa says The US wants four concessions: B-BBEE – not scrapping this controversial policy, which the polls tell us most South Africans reject, but amending it to exempt US companies from having to surrender 30% ownership and instead allowing them to contribute in some other way to economic upliftment. Expropriation Act – not repealing the Act but amending it to make legally unambiguous that expropriation without compensation will not occur. Kill the Boer, kill the farmer chant – not banning it, but the ANC unambiguously condemning it, something Ramaphosa has never been able to bring himself to do. Farm attacks – not declaring whites a protected species, but making such attacks a priority crime. These are modest, sensible asks. Yet they've been met with resistance from within an ANC that remains in thrall to revolutionary aspirations. In other words, the ANC would rather see the country ground down than let go of its delusions. It is ready to sacrifice jobs, trade, growth and diplomatic standing to preserve the illusion that it and its communist and trade union partners are still engaged in a revolutionary struggle, rather than face the fact that it and its GNU coalition partners are responsible for a total failure in governance. For the sake of South Africa, as well as in the long-term interests of the ANC, if Ramaphosa is going to compromise, it patently is better to do so with Trump than with the SACP. And for the DA, which has linked its fortunes to the ANC, if it is ever going to stand firm and not compromise by letting the ANC off the hook yet again, now is the moment. NOW READ: 'We almost made a mistake last elections': Floyd Shivambu's Afrika Mayibuye to grab MK party's KZN votes?
TimesLIVE
an hour ago
- TimesLIVE
Vance says Ukraine peace deal unlikely to satisfy either side
US vice president JD Vance said a negotiated settlement between Russia and Ukraine is unlikely to satisfy either side, and any peace deal will likely leave Moscow and Kyiv 'unhappy'. He said the US is aiming for a settlement the two countries can accept. 'It's not going to make anybody super happy. The Russians and the Ukrainians, probably at the end of the day, are going to be unhappy with it,' he said in a Fox News interview aired on Sunday. US President Donald Trump said on Friday he will meet Russian President Vladimir Putin on August 15 in Alaska to negotiate an end to the war in Ukraine. Trump said Russia and Ukraine were close to a ceasefire deal that could end the three-and-a-half-year conflict, possibly requiring Ukraine to surrender significant territory. Zelensky, however, said on Saturday Ukraine cannot violate its constitution on territorial issues, adding 'Ukrainians will not gift their land to the occupiers'. In the Fox News interview recorded on Friday, Vance said the US was working to schedule talks between Putin, Zelensky, and Trump, but he did not think it would be productive for Putin to meet Zelensky before speaking to Trump. He said: 'We're at a point where we're trying to figure out scheduling and things like that around when the three leaders could sit down and discuss an end to the conflict.'
