South Africa has been given three weeks in which to conclude a new trade deal more favourable to the United States, or face 30% tariffs on all imports into the US from next month.
This is the import of a letter sent by US president Donald Trump to South African president Cyril Ramaphosa this week.
It marks the next phase of the tariff saga, which began on 2 April with the announcement of US tariffs on all countries except Russia. For South Africa, that meant tariffs of 25% on steel and aluminium and 10% on everything else. The new tariffs ended South Africa’s duty-free access to US markets under the AGOA legislation.
Then, on 9 April, President Trump announced huge new tariffs on all US trading partners, including 31% for South Africa. These were suspended for 90 days to allow those countries to negotiate new trade deals with the US.
The latest Trump announcement effectively extends that deadline to 1 August. Will there be a trade deal before then? South African officials are trying desperately to get one.
President Trump says “perhaps”, but South Africa will have to “open your heretofore closed trading markets to the United States, and eliminate your tariff and non-tariff policies and trade barriers”.
In response, President Ramaphosa says the US is working on inaccurate trade information, as pointed out in a framework deal sent to the US in May. South Africa is still awaiting a response.
In the meantime, the April tariff rates continue to apply. According to trade advisor Donald MacKay the new 30% tariffs would not apply to platinum, gold, chrome and coal, which comprise about half of South Africa’s exports to the US.
Everything else would attract 30% tariffs, except for cars at 25% and steel and aluminium, which have been bumped up to 50%, MacKay says.
