US tariffs: SA sends new proposal but no changes to laws

The Citizen

a day ago

The new offer sent by South Africa responds to the issues the US previously raised.
South Africa sent off its new proposal to avoid the US tariff of 30% on goods from South Africa exported to the US, but the country is not planning to change the laws that seem to be on the US president's agenda.
Parks Tau, minister of trade, industry and competition, said at a press conference on Tuesday that since the 30% unilateral tariff imposed by the US which came into force on 7 August, government has been working on a response anchored on five key elements:
continued engagement with the United States to secure a deal and reduce the tariffs;
diversification of exports to alternate markets;
an economic response package to vulnerable companies and workers;
trade defence against import surge and dumping; and
demand side interventions.
He said regarding continued engagement with the US, cabinet approved that South Africa submits a revised offer as a basis for negotiations. The new offer builds on the previous offer submitted in May and substantively responds to the issues the US raised in the 2025 National Trade Estimates Report.
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SA on top of sanitary measures
Tau pointed out that South Africa already addressed sanitary and phytosanitary measures in compliance with the bio-security protocols for:
Poultry: South Africa granted market access under the conditional self-ban and self-lifting system to ensure that the US can leverage the tariff rate quota of 72 000 tons already agreed to in 2016;
Blueberries: South Africa granted market access for states that are free of fruit fly and agreed to mitigation measures with those states with fruit fly; and
Pork: which is open subject to the bio-security requirements.
'Consequently, the USA-Africa Trade Desk informed us that it will be shipping containers of poultry and pork to South Africa in two weeks' time, which is testimony that these issues have been resolved.'
Another significant request from the US was that South Africa consider reducing tariffs as a way to address the deficit and tariff disparity with the European Union due to the SADC-EU Economic Partnership Agreement.
Tau said South Africa continues consultations with industry and in this regard, in consultation with other members of the Southern African Customs Union, will identify specific lines to respond to this request.'
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Cabinet endorsed economic response package to US tariffs
Cabinet also endorsed the economic response package that includes:
The establishment of an export support desk, which will serve as a direct point of contact for affected companies. Tau said, so far, it has helped 23 companies. In addition, the department also initiated meetings with more than 54 South African exporters to the US, focusing on updates on the negotiations, clarifications on tariffs, elements of an economic response package and issues linked to market diversification.
Measures to assist companies to absorb the tariff and facilitate long-term resilience and growth strategies to protect jobs and productive capacity in South Africa.
A localisation support fund (LSF) for affected companies to contribute to the national effort.
The Export and Competitiveness Support Programme (ECSP), which will include a working capital facility and plant and equipment facility to address short to medium term needs across all industries.
Working with the department of employment and labour on measures to mitigate potential job losses, using existing instruments within its entities that can be adjusted to respond to the current challenges.
After consultations with the Competition Commission, a block exemption for exporters was introduced to enable collaboration and coordination among competitors. A draft block exemption will be published by the end of the week to conclude the process as fast as possible. Information will be available on the department's website.
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Finding alternative export markets
About finding alternate export markets, Tau said the new US tariff on South Africa's exports is a significant policy shift that necessitates a clear and decisive response.
'South Africa accelerated its diversification efforts of export markets and enhanced competitiveness to mitigate the economic impact of losing preferential trade access.
'The diversification is a strategic imperative to ensure our economy is more resilient to economic shocks. This is not a plan B but a plan A for long-term resilience and competitiveness.
'We are committed to strengthening our relationships, particularly under the African Continental Free Trade Area, to build regional resilience. We will also continue the work we started with our European partners towards enhancing our trade and investment relations in a manner that unlocks sustainable growth and development and entrenches South Africa in new supply chains.'
He added that government is also looking at Asia, including Japan, Vietnam and Thailand, the Middle East and India. 'We are pursuing these markets because we see growing demand, existing negotiations and a positive reception to South African products.
'This is not just about trade numbers but directly linked to job protection. Diversification is about protecting rural livelihoods and sustainable agricultural growth for our people.'
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High-level negotiation team ready to talk about US tariffs
A high-level negotiation team, including the Department of Trade, Industry and Competition and the Department of Agriculture, has been identified to engage the US, Tau says. 'Our goal is to demonstrate that South African exports do not pose a threat to US industries and that our trade relationship is in fact complementary.
'While the US is our third largest trading partner after the EU and China, South Africa is the 43rd export destination for the United States and accounts for 0.25% of total US imports and therefore not a threat to US production.
'In addition, the US market accounts for about 4% of our total agriculture exports, or R9.8 billion ($537 million) of our total agricultural exports, an increase of 104% from 2018.'
Turning to protecting domestic industry against import surge and dumping, Tau pointed out the unilateral US tariffs do not only apply to South Africa. The US tariffs also affect over 130 trading partners and many of the US orders that now face prohibitive restrictions will seek other 'outlets', he said.
'In addition, chronic overcapacity observed in the world markets for key product markets like steel, glass, subsidised agricultural products, solar and automotive vehicles will make this search incessantly harmful for our domestic industry.'
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SA ready to protect its industry, Tau says
'Therefore, South Africa stands ready to make use of its trade remedy measures to safeguard and protect its industry, within the prevailing agreements of the World Trade Organisation. This will involve the consideration and use of anti-dumping, anti-subsidy and safeguard measures to protect the domestic industry which may be affected by trade deflection and/or diversion.'
Speaking about demand side interventions to leverage the buying power of local consumers, private sector and government, Tau said Proudly South Africa will intensify outreach with corporates and retailers through its online store and Market Access Platform (MAP) procurement tool targeted at the private sector to support increased domestic sales of products, with future export capability of the online platform to be used to assist with export market diversification.