US-SA trade deal still in limbo as tariff deadline looms

Daily Maverick

6 days ago

The Trade and Industry Ministry says it is still awaiting 'substantive feedback' from the US on its trade proposal as the 1 August deadline looms.
South Africa and the US have still not reached a trade deal, days before US President Donald Trump's 30% tariff on South African goods is due to take effect.
In a statement on Tuesday, 29 July, the Department of Trade, Industry and Competition (DTIC) said it remained committed to the conclusion of a trade agreement with the US, as it waits for feedback from the Trump administration on its trade proposal.
'The intersection of geopolitical, domestic and trade issues best defines the current impasse between South Africa and the United States, and a reset is unavoidable,' read the statement.
'Our view is that negotiations remain the best tool to deal with the issues that are on the table… We remain committed to the cause as we await substantive feedback from our US counterparts on the final status [of] our framework deal,' it continued.
Earlier this month, Trump announced that he would impose a 30% tariff on South African exports to the US from 1 August. Multiple other countries are also facing varying tariff rates.
While some countries, including the UK, Japan and Vietnam, have bagged trade agreements with the US, not a single African nation has reached a deal with America.
'Prepared for several potential scenarios'
After Trump announced his global ' reciprocal ' tariffs in April, before agreeing to suspend their application for 90 days, Pretoria was eager to begin negotiations with America over tariffs.
It proffered a proposed framework deal to US trade representatives in Washington in May, before President Cyril Ramaphosa and Trump met at the White House. Pretoria was later told it needed to revise this proposal, in accordance with the Trump administration's new template for US trade with sub-Saharan Africa, which it was told would be shared ' soon '.
However, it appeared that as of Tuesday, Pretoria was still waiting for this template.
'As the Department of Trade, Industry and Competition, we have been in a period of intense negotiations with the United States. We have signed a condition precedent document and have readied our inputs for entry into the template, which is to follow from the US,' it said.
Department of International Relations and Cooperation (Dirco) director-general Zane Dangor said on Tuesday, there were no guarantees of a trade deal with the US by 1 August, with issues such as black economic empowerment (BEE) obscuring matters, according to a News24 report.
If implemented, Trump's punishing tariffs will kneecap South African industries, including the automotive sector and the citrus industry.
But the DTIC suggested it was preparing for other eventualities should a deal not be signed.
'Despite the challenges that have been presented by this period, we have put our best foot forward, bringing together the subject specialists within our ranks that have dug deep to ensure that our country is adequately prepared for a number of potential scenarios.
'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,' it said.
The DTIC said it had no intention of 'decoupling' from the US.
Details of the trade proposal
Pretoria's initial trade proposal included deals on agriculture, critical minerals, automotives and other exports.
According to the DTIC, some of the elements of the framework deal include:
Importing 75-100 petajoules of liquefied natural gas from the US for a 10-year period, unlocking $12-billion.
The simplification of US poultry exports under the 2016 tariff rate quota, which is expected to unlock about $91-million in trade. In addition, readiness to open market access for blueberries, subject to the necessary protocols.
A commitment from South African firms to invest $3.3-billion in US industries such as mining and metals recycling, with an agreement from both governments to pursue joint investment in critical minerals, pharmaceuticals and agricultural machinery.
The exemption of specific sectors from reciprocal tariffs to preserve supply chains. For example, ship-building, counter-seasonal agricultural trade, and exports from MSMEs [micro, small and medium enterprises] of less than $1-million per year. DM