Note: Following publication of this article, it was confirmed that an announcement on the package of support measures for exporters exposed to the US tariffs would be held on Tuesday August 12, rather then the Monday August 11.
The South African government will on Monday August 11 unveil the support measures for companies and workers affected by the imposition of 30% reciprocal tariffs by the US on South African exports as from 12:01 am eastern daylight time on August 8.
The tariffs are being implemented notwithstanding a telephone call between President Cyril Ramaphosa and US President Donald Trump on August 6, during which it was agreed that trade negotiations should continue.
In a statement released by the South African Presidency following the call, it was confirmed that both leaders “undertook to continue with further engagements recognising the various trade negotiations the US is currently involved in”.
The statement added that their respective trade negotiating teams would take forward more detailed discussions.
Cabinet spokesperson and Minister in The Presidency Khumbudzo Ntshavheni said the call had ensured that there was still “room for negotiation”, while adding that South Africa remained optimistic that the tariffs would be “reviewed” as soon as the two countries reached a deal.
No details were provided regarding the modalities or timelines for the further talks, with Ntshavheni confirming only that they would be led by Trade, Industry and Competition Minister Parks Tau, with the support of Agriculture Minister John Steenhuisen and International Relations and Cooperation Minister Ronald Lamola.
No details were provided as to what changes South Africa was prepared to make relative to the ‘Framework Agreement’ presented during Ramaphosa’s visit to Washington in May, and which failed to avert the 30% tariffs. This, despite including proposals in relation to the importation of liquefied natural gas from the US, concessions on agricultural trade, as well as joint investment commitments.
Asked again whether South Africa was considering concessions in relation to black empowerment and affirmative action, alongside taking firmer action in relation to farm murders, Ntshavheni asserted that South Africa’s transformation agenda was “non-negotiable”.
“We are not pursuing the transformation agenda for its own sake, but it is to make sure that we build an equal, united and prosperous South Africa,” she said during her briefing on Thursday of decisions taken by Cabinet at its August 6 meeting.
She announced that Cabinet had affirmed government’s commitment to “finding constructive and sustainable solutions through continued engagements with the United States of America including at a Presidential level”.
“Government’s efforts remain focused on growing the economy to save and create new jobs, which include intensifying diversification efforts and strengthening global supply chain integration as the country works to expand its export markets to Asia, Europe, the Middle East, and across Africa to enhance our economic resilience.”
Ntshavheni also confirmed that government was focusing on demand-side interventions for industries impacted by the tariffs, together with targeted interventions to ensure industry stability and to safeguard employment.
Government estimated that some 30 000 jobs could be affected by the tariffs across various industries, including agriculture and automotives.
Details of the final support package would be unveiled at a briefing to be hosted by Tau on Monday, but would include:
- The establishment of an Export Support Desk, to serve as a direct point of contact for affected companies;
- Measures to assist companies to absorb the tariff so as to protect jobs and productive capacity;
- Leveraging of the Localisation Support Fund to support the competitiveness of affected companies;
- Using the Export and Competitiveness Support Programme to provide a working capital facility and a plant and equipment facility to address short- to medium-term needs across affected industries;
- Deploying existing instruments of the Department of Employment and Labour to mitigate potential job losses; and
- The publication by the Competition Commission of a draft block exemption for exporters, which would allow competitor companies to cooperate to improve economies of scale and export efficiencies.
Separately in the Cabinet statement it was noted that the US had indicated their return to full participation in the G20 meetings, albeit at the level of Under-Secretary.
South Africa is hosting the G20 meeting in November and will handover the presidency to the US, whose participation in preparatory meetings for the Johannesburg gathering has been patchy.
Meanwhile, the Cabinet statement also highlighted progress being made on the ‘South Africa-China Trade and Investment Package 2025 – 2029’, which had been proposed by South Africa as a “basis for economic engagement with China”.
The package includes trade, investment, industrial development and skills development components, with the trade component prioritising exchange of the top 100 products between the countries, establishing a permanent expo in China, as well as greater cooperation to address regulatory measures.
The investment and industrial development component, meanwhile, prioritises investments in steel, tyres, automotive, battery manufacturing, pharmaceuticals and medical devices, rail manufacturing and the digital economy.
The package was shared with the government of China during a working visit to that country in July led by Deputy President Paul Mashatile.
