31-07-2025
Hopes pinned on last-minute trade deal with the United States
South Africa faces a decisive moment today as the threat of debilitating 30% United States (US) import tariffs looms large, with hopes pinned on a last-minute trade agreement that could shield key industries, prevent economic disruption and safeguard thousands of jobs across the country.
The Witness reports that among more than 100 economies targeted in a sweeping global tariff clampdown by US President Donald Trump's administration, South Africa has submitted a detailed framework proposal to Washington aimed at averting the tariffs, which are set to take effect from tomorrow.
Trade, Industry and Competition (DTIC) Minister Parks Tau, who is part of the interministerial team leading negotiations with the US government, said the proposal is built around a clear commitment to prioritising national interests.
'The DTIC has made this issue an apex priority… and we have centred South Africa and her people as our non-negotiable.
'Rest assured, we will not waver in our mission to ensure we make South Africa proud.
'We remain committed to the cause as we await substantive feedback from our U.S. counterparts on the final status of our framework deal,' he said.
Despite Trump stating yesterday on his social media platform that there would be no extension to the 'August first deadline', Tau said the government was confident in the strength of its submission and believed it offered a sound, mutually beneficial business proposition.
The proposal presented by South Africa includes a range of trade and investment commitments designed to enhance bilateral economic ties, namely:
Importing between 75 and 100 petajoules of liquefied natural gas from the US over a 10-year period, unlocking $12b in trade opportunities.
Streamlining poultry imports under the 2016 tariff rate quota, with the potential to unlock about $91m in trade. South Africa has also indicated readiness to expand market access for US blueberries, pending finalisation of relevant protocols.
Committing R61b ($3.3b) in investment by South African firms into US sectors such as mining and metals recycling, alongside new collaborative initiatives in pharmaceuticals, agricultural machinery and critical minerals.
Requesting the exemption of key sectors from reciprocal tariffs to preserve global supply chains, including shipbuilding, counter-seasonal agriculture, and small-scale exports from enterprises with turnover under $1m.
If the tariffs are imposed, they are expected to hit two of South Africa's largest export sectors the hardest: automotive manufacturing and agriculture.
The automotive industry, which directly and indirectly employs more than 500 000 South Africans, exported vehicles worth R35b to the US last year.
Industry leaders have warned that a 30% tariff could trigger job losses and ripple effects across the broader manufacturing value chain.
The agricultural sector, which exports approximately R150b in goods to the US annually, also stands to suffer significant damage, with farmers, producers, and exporters all vulnerable to higher trade barriers.
While remaining hopeful of a breakthrough, Tau confirmed that contingency measures were already in motion.
'We have planned for these scenarios and have not sat idle. We are working with other government departments on a response plan which includes a support desk within the DTIC.
'Our response package also focuses on demand-side interventions in the impacted industries,' he said.
International relations expert Siyabonga Ntombela acknowledged the seriousness of the situation but maintained that a negotiated outcome remained possible.
'If not by Friday, I am sure we will eventually get a lower rate as the country will probably push for negotiations to continue past the deadline,' Ntombela said.
He added: 'The US has many companies based here and we have an interest in the US market, so it's of mutual interest that a deal is agreed upon. In international relations and politics, nations don't have permanent enemies, but they always have permanent interests.'
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