Latest news with #AfricaGrowthandOpportunitiesAct
TimesLIVE
22-05-2025
- Business
- TimesLIVE
Ramaphosa's US coup: Trump commits to trade engagements
President Cyril Ramaphosa has assurance from US President Donald Trump that he will consider attending the G20 leaders' summit later this year. Ramaphosa held a media briefing with the South African press following a tense visit to the White House, which he managed to de-escalate as Trump accused the South African government of persecuting and taking land from white South Africans. Despite contentious debate and tensions stoked by false claims of genocide during the televised meeting between the two heads of state, Ramaphosa said the topic did not feature in the closed-door meeting, which included lunch. Instead, the two leaders engaged on regional conflicts in Africa and Eastern Europe as well as trade relations. However, the two leaders did not touch on Israel and South Africa's case at the International Court of Justice. 'So I was rather pleased that there's a firm agreement and undertaking to continue engaging. That was one of the key outcomes that we had wanted. "Our objective in coming here was to reset relations between the two countries and to reposition our relations, which had become contaminated by some of the issues that had been raised during the engagement, or what many people thought was also contaminating relations, for instance, the ICJ case and Ukraine, Russia and all that,' Ramaphosa said. He said while Trump raised concerns about white South Africans, 'in the discussions over lunch, we didn't dwell on that issue'. He said Trump asked how the US could assist South Africa. The delegation pointed to more investments from the US. He said team South Africa told the Trump delegates they required a more positive disposition from the US, which would unlock investment. 'We want to keep the jobs that we have, that have been created by US companies. And we want more and more US companies to come and invest,' he said. Ramaphosa said part of the talks included the Africa Growth and Opportunities Act, which has been nullified by Trump's punitive tariffs. His biggest takeaway was Trump's commitment to consider attending the G20 summit, telling journalists that he stressed to the US president that it would be important to the success of the summit. 'And I said, he needs to be there. I don't want to hand over the presidency of the G20 to an empty chair, I want to hand it over to him sitting in that chair in November … The G20 would be more impactful on global matters with the participation of the largest economy in the world. 'So my takeaway is that G20 participation by the US is going to be happening,' he said. He said the South African government had managed to start resetting their relations with the US government and that ministers would begin to engage with one another over trade relations.
The Herald
23-04-2025
- Automotive
- The Herald
Nelson Mandela Bay not immune from global trade wars
US President Donald Trump's 90-day pause on sweeping 'reciprocal' tariffs on imports from around the globe may have brought a sense of relief, but SA cannot afford to push pause on efforts to address what may potentially have major implications for our local economy. While the more than 30% duty allocated to all South African goods has been temporarily suspended, the 10% across-the-board base rate of the US's global reciprocal tariffs announced on April 2 remains in place. In addition, the 25% import tariff on vehicles and a targeted list of automotive components, announced earlier under the US Trade Expansion Act (referred to as 'section 232 tariffs') also remains in place, and has already come into effect. It is still not clear whether automotive exports to the US will be subject to a 'stacked' tariff, that is the reciprocal 10% plus the 25% auto-specific duty. These actions effectively wipe out the duty-free access to the US market that South African goods, particularly from the agriculture and automotive sectors, have enjoyed under the Africa Growth and Opportunities Act (Agoa). The preferential trade access under this Act comes to an end in September, unless the legislation is renewed — which increasingly looks unlikely in the current US policy environment. The US is SA's second biggest trading partner and our automotive industry's second biggest export market, with vehicle exports to the US in 2024 valued at R24bn and components at R4.3bn. More than 24,000 vehicles exported from SA to the US in 2024 represent 8% of our total vehicle exports — which may sound small, but this number represents thousands of jobs at local auto and components manufacturers, and in the supply chains of logistics and other services supporting this sector. Losing this 8% will make many of the companies in the supply chain sub-critical. The automotive industry is the largest manufacturing sector in the country and accounts for 60% of SA's exported manufactured goods. It is a privilege to have an industry like this in our country, especially considering the technology and skills which it brings and its knock-on job creation impact through the economic eco-system. The Nelson Mandela Bay economy is highly reliant on automotive manufacturing, representing almost half the country's direct employment in this sector. It is vital to understand that the impact on the South African economy of these tariffs and the global trade wars they are sparking goes far beyond the bilateral trading relationship with the USA. The entire global trade system has been upended and the competitiveness of local manufacturers, and the attractiveness of SA as an investment destination versus other manufacturing locations, is at stake. In particular, SA's Southern African Economic Partnership Agreement with the European Union and duty-free access to the US market under Agoa has boosted the case for investment in the local automotive manufacturing industry over the past two decades, and the loss of these benefits will have a negative impact on future investment decisions. This, together with how the tariffs affect and are responded to by other countries, will affect global business strategies and decisions on optimal manufacturing locations. A number of countries will now have significant cost advantages over SA, including countries on this continent, while other countries like Japan and Korea will simply absorb the tariffs through internal incentives. This will put SA, which already has a logistics and distance disadvantage compared to other markets, in a very uncompetitive position. Our local manufacturing economy, which has been relatively agile and resilient in responding to energy, logistics and enabling environment challenges in the country, is already struggling to be competitive versus other manufacturing operations around the world. The SA automotive industry represents just 0.6% of global vehicle production, and its competitiveness relies heavily on the economies of scale derived from combined domestic demand and export orders. A decline in export orders, if global automakers shift manufacturing from their SA plants to more favourable locations due to the impact of tariffs, would be a severe blow to those economies of scale, with knock-on impacts in terms of job losses and rising prices for consumers. From a Bay perspective, our economy is anchored by vehicle manufacturing and includes a deep components manufacturing eco-system of first-, second- and third-tier suppliers. Beyond this logistics, security, cleaning, catering, retailers and most types of businesses in the Bay indirectly benefit from the industry. Thousands and thousands of local jobs have been created and are sustained through our automotive manufacturing industry. The agriculture sector will be impacted too by the 10% base rate import tariff, particularly in citrus, where the Eastern Cape is the second largest citrus producing province, and the Sundays River Valley is the country's largest single production area. SA citrus plays an important role in supplying the US market during their off-season, and our duty-free access under Agoa has enabled SA citrus to compete with other southern hemisphere producers such as Peru and Chile. As a result, SA's citrus exports to the US have almost doubled since 2017. The citrus industry is seasonal, and these changes are happening at the start of the new citrus season, creating uncertainty. A speedy and proactive strategic response is required to enable local manufacturers and agricultural producers to find alternative solutions and implement mitigation actions. Government needs to move with absolute urgency to restore a mutually beneficial trading relationship with the US, while assessing alternative markets and opportunities to reinvent and reposition our manufacturing and other affected sectors. The situation has highlighted the pressing need for SA to diversify its trading relations, especially to leveraging relationships with Brics partners (where there are currently no free-trade agreements in place) and strengthening trade relations with the European Union and South East Asia markets. Opportunities in the burgeoning economies of the Middle East must be explored, as well as under the African Continental Free Trade Agreement (AfCFTA). If we are to create new markets for our locally built vehicles on the continent, it is vital that the rules of origin for vehicles are finalised as a matter of urgency, and that grey imports are prohibited. Alongside trade policy, it is also crucial that government review industrial policy, particularly the SA Automotive Master Plan and automotive industry incentives to protect the competitiveness of local manufacturing — shielding against the impact of punitive tariffs and the flood of cheap imports and dumping of vehicles, as well as accelerating the localisation of component manufacturing. As a small country and economy, heavily dependent on commodity exports, we must become more competitive to build resilience against these global shifts. Competitiveness is not just a matter for industry to address. It needs to start with an enabling environment with regards to efficient logistics especially in terms of the ports and rail, stable and reliable energy supply and the delivery of basic municipal services. Now is the time for all of us to take action to retain vital investment and employment in the Bay. Denise van Huyssteen is chief executive of the Nelson Mandela Bay Business Chamber. The Herald
Yahoo
19-02-2025
- Business
- Yahoo
South Africa's white farmers would be among victims if Trump ends growth bill
By Tim Cocks JOHANNESBURG (Reuters) - Donald Trump's axing of aid to South Africa, in response to land reform policies he says will harm its white minority, has raised fears a trade deal may be next, though any such move would hurt the same farmers the U.S. president says he wants to help. Under the Africa Growth and Opportunities Act, South Africa gets tariff-free quotas on agricultural exports including wine, citrus, soybeans, sugar cane and beef. The Act makes up about a quarter of its $15 billion annual trade with the United States. That compares with under $440 million in U.S. aid, in 2023. See for yourself — The Yodel is the go-to source for daily news, entertainment and feel-good stories. By signing up, you agree to our Terms and Privacy Policy. "It is not clear whether the exporters are Black or white; we don't record such data," said Wandile Sihlobo, chief economist of the Agricultural Business Chamber of South Africa, but only a tenth of farm output is from Black farmers. "The majority of white farmers (are) likely have a significant exposure into the U.S. market," he said. Sihlobo said produce shipped to the United States makes up 4% of agricultural exports, equal to about $450 million a year, compared with 19% for the European Union and 38% to the rest of Africa. But some producers, like those for citrus fruit and wine, are more exposed - the former made $134 million in 2022, 7% of the country's total, while the U.S. is its fourth largest wine market, Sihlobo said. "It's not industry-ending ... but it's very unfortunate," said Justin Chadwick, Citrus Growers Association president, estimating U.S.-bound exports at 120,000 tonnes. "We (would have) ... to find another home for that fruit ... and our other markets are pretty full." 'UNWISE' The Africa Growth and Opportunities Act (AGOA) is up for review in September. Some Republicans want to punish South Africa for land reform, its genocide case against Israel and other actions such as naval exercises with Russia and China. The U.S. State Department did not respond to a request for comment. "We urge you to revoke South Africa's preference benefits, under the Act, four congressmen wrote to Trump on Feb. 11, CNBC news reported. "There's a real likelihood that South Africa is not going to be included in a renewed AGOA," Chatham House senior research fellow Chris Vandome, said. "It's position is really fragile". Trump singled out a law that President Cyril Ramaphosa signed last month enabling land expropriation - in rare cases without compensation - after decades of voluntary purchases barely dented inequalities between a white minority who own 75% of freehold land and majority Blacks with 4%. Some farmers say the law violates property rights. Groups defending Afrikaners, descendents of Dutch settlers who make up the largest white ethnic group and own much of privately held land, have lobbied Republican politicians for years. "It was unwise. They're shooting themselves in the foot," Foreign Minister Ronald Lamola told Reuters in an interview on Monday. "If AGOA is cut, it's a cutting of white farmers." But Ernst Roets, then-lobbyist for Afrikaner group Afriforum, who travelled to the States in 2018 and brought the land issue to Fox News and some Republican officials - the year Trump first took an interest in it - said he had "no regrets." "We're hoping for pressure on the South African government to reconsider its destructive policy ideas," Roets, now part of a different lobby group, said. Not all agribusiness will lose if the Act gets chopped. Poultry farmers struggling to "compete with dumping" of subsidised U.S. chicken imports under the Act would benefit, said Marthinus Stander, a board member of the South African Poultry Association.
Reuters
19-02-2025
- Business
- Reuters
South Africa's white farmers would be among victims if Trump ends growth bill
Summary Africa trade deal AGOA key for some South African exports Axing it could harm white farmers Trump claims to support Some Republicans push to revoke country's AGOA benefits JOHANNESBURG, Feb 19 (Reuters) - Donald Trump's axing of aid to South Africa, in response to land reform policies he says will harm its white minority, has raised fears a trade deal may be next, though any such move would hurt the same farmers the U.S. president says he wants to help. Under the Africa Growth and Opportunities Act, South Africa gets tariff-free quotas on agricultural exports including wine, citrus, soybeans, sugar cane and beef. The Act makes up about a quarter of its $15 billion annual trade with the United States. That compares with under $440 million in U.S. aid, in 2023. "It is not clear whether the exporters are Black or white; we don't record such data," said Wandile Sihlobo, chief economist of the Agricultural Business Chamber of South Africa, but only a tenth of farm output is from Black farmers. "The majority of white farmers (are) likely have a significant exposure into the U.S. market," he said. Sihlobo said produce shipped to the United States makes up 4% of agricultural exports, equal to about $450 million a year, compared with 19% for the European Union and 38% to the rest of Africa. But some producers, like those for citrus fruit and wine, are more exposed - the former made $134 million in 2022, 7% of the country's total, while the U.S. is its fourth largest wine market, Sihlobo said. "It's not industry-ending ... but it's very unfortunate," said Justin Chadwick, Citrus Growers Association president, estimating U.S.-bound exports at 120,000 tonnes. "We (would have) ... to find another home for that fruit ... and our other markets are pretty full." 'UNWISE' The Africa Growth and Opportunities Act (AGOA) is up for review in September. Some Republicans want to punish South Africa for land reform, its genocide case against Israel and other actions such as naval exercises with Russia and China. The U.S. State Department did not respond to a request for comment. "We urge you to revoke South Africa's preference benefits, under the Act, four congressmen wrote to Trump on Feb. 11, CNBC news reported. "There's a real likelihood that South Africa is not going to be included in a renewed AGOA," Chatham House senior research fellow Chris Vandome, said. "It's position is really fragile". Trump singled out a law that President Cyril Ramaphosa signed last month enabling land expropriation - in rare cases without compensation - after decades of voluntary purchases barely dented inequalities between a white minority who own 75% of freehold land and majority Blacks with 4%. Some farmers say the law violates property rights. Groups defending Afrikaners, descendents of Dutch settlers who make up the largest white ethnic group and own much of privately held land, have lobbied Republican politicians for years. "It was unwise. They're shooting themselves in the foot," Foreign Minister Ronald Lamola told Reuters in an interview on Monday. "If AGOA is cut, it's a cutting of white farmers." But Ernst Roets, then-lobbyist for Afrikaner group Afriforum, who travelled to the States in 2018 and brought the land issue to Fox News and some Republican officials - the year Trump first took an interest in it - said he had "no regrets." "We're hoping for pressure on the South African government to reconsider its destructive policy ideas," Roets, now part of a different lobby group, said. Not all agribusiness will lose if the Act gets chopped. Poultry farmers struggling to "compete with dumping" of subsidised U.S. chicken imports under the Act would benefit, said Marthinus Stander, a board member of the South African Poultry Association.
