SA seeks relief as tariffs kick in. Cabinet announces support plan
Cabinet confirms Ramaphosa phoned Trump amid tariff escalation.
Export support desk to assist industries hit by 30% export tariff.
South Africa joins Brazil and India in grappling with US duties.
Cabinet has reaffirmed its commitment to ongoing negotiations with the US as the 30% tariff on exports to that country comes into effect at midnight, a move expected to weigh heavily on South Africa's automotive, steel, citrus and agroprocessing sectors.
At a post-Cabinet media briefing on Thursday, Minister in the Presidency Khumbudzo Ntshavheni said Cabinet had received an update on the stalled framework deal with the US and noted the 'urgency' of securing a resolution.
She confirmed that President Cyril Ramaphosa had called US President Donald Trump on Wednesday to salvage negotiations and avoid long-term damage to South Africa's export capacity.
Government's efforts remain focused on growing the economy, saving jobs and creating new ones. Our engagements with the US are continuing, including at the presidential level.
Khumbudzo Ntshavheni
She announced that Cabinet had agreed to a set of targeted support measures to help cushion affected industries, including the creation of an export support desk that will act as a direct liaison with businesses affected by the new tariffs and will assist with tariff absorption and long-term resilience planning.
The departments of trade, agriculture and justice are coordinating further industry-specific interventions, and detailed briefings are expected early next week.
'In the face of external shocks, we are intensifying efforts to diversify our export markets and deepen South Africa's integration into global supply chains,' said Ntshavheni.
Asia, Europe, the Middle East, and African regional markets remain key to building our economic resilience.
Khumbudzo Ntshavheni
Attempts to avert the implementation of the tariffs included a proposal to invest $3.3 billion in US industries and purchase US liquefied natural gas. The proposal did not result in a deal.
South Africa joins several other countries in facing steep US import duties.
Brazil has been hit with a 50% tariff, and its president, Luiz Inacio Lula da Silva has declined to make personal overtures to Trump. India has taken a similarly firm stance, with Prime Minister Narendra Modi rejecting any compromises that may affect farmers.
Trump announced an additional 25% tariff on Indian goods on Wednesday, raising the total duty to 50% – among the highest imposed on any US trading partner. The new tariff, effective August 28, is meant to penalise India for continuing to buy Russian oil.
Vietnam, meanwhile, secured a reduction of its tariff from 46% to 20% and said further talks are ongoing. According to Reuters, Switzerland's government held an emergency session on Thursday after returning empty-handed from its own last-minute talks.
Trade analysts warn that the full impact of the tariffs may take time to materialise.
William Reinsch, a senior fellow at the Centre for Strategic and International Studies, told Reuters: 'There'll be some supply chain rearrangement. There'll be a new equilibrium. Prices here [in the US] will go up, but it'll take a while for that to show up in a major way.'
Cabinet said it remained hopeful that a review of the tariffs could take place if negotiations with the US resume meaningfully.
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