South Africa’s government is putting the final touches to an overarching package that aims to shield businesses against the fallout from punitive US trade tariffs and plans to present it to lawmakers later this week.
US President Donald Trump last week announced that imports from South Africa will be subjected to 30% duties — the highest in sub-Saharan Africa — among a slew of levies that will be imposed from Aug. 7 as part of his efforts to reshape America’s relationships with its trading partners.
The move will affect about 30,000 jobs in South Africa, Simphiwe Hamilton, the trade department’s director-general, told reporters at a briefing in Johannesburg on Monday.
The impact will primarily impact the agricultural and manufacturing sectors, including the country’s major car factories.
The department last week said it would set up a support desk to advise companies affected by the tariffs and indicated they would be assisted financially, but didn’t specify how much money would be made available or how it would be disbursed.
Also on the cards are changes to anti-trust rules, including a block exemption that will allow exporters to collaborate.
“We are going to cabinet on Wednesday with a set of more detailed proposals that we are finalizing, that will elaborate on the structure of the support package,” Trade, Industry and Competition Minister Parks Tau told the briefing.
In his weekly newsletter issued earlier Monday, President Cyril Ramaphosa said South Africa plans to scale up its trade missions into new markets in Africa and beyond.
He also mentioned the National Exporter Development Programme, which aims to grow the pool of export-ready companies.
Tau said the market-diversification drive is already bearing fruit, with exporters making significant inroads into new, high-growth markets across Asia and the Middle East, including the United Arab Emirates, Qatar and Saudi Arabia.
The country also plans to sign a memorandum of understanding on industrialization with China, which aims at further enhancing its export offering, he said.
South Africa shipped goods worth $14.7 billion (R263 billion) to the US last year, its second-biggest export destination after China.
While the government’s efforts to open up new markets is a welcome development, the process will take time and it will be hard-pressed to compensate for less favorable access to the world’s biggest economy, analysts and business groups say.
Lobby group Business Leadership South Africa expects the new tariffs to pose a severe threat to the country’s manufacturing and farming industries, particularly in the Eastern Cape province.
“A Trade Crisis Committee should be established, modeled after successful crisis response frameworks like the National Electricity Crisis Committee,” it said on Monday.
“This body, including National Treasury, business leaders, and key government departments would ensure fast, coordinated action to open new markets, provide financial support and maintain employment.”
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