However, there is nothing in Tau’s plan that we have not seen before, while we now wait for Donald Trump to decide.
The new United States (US) tariffs, where South African imports into the US would be subject to a 30% import tariff, are kicking in on Friday and with little communication from government, experts were starting to say it seems that South Africa has no plan.
However, this afternoon, the Department of Trade, Industry and Competition (DTIC) sent out a press release with Minister of Trade, Industry and Competition, Parks Tau, reaffirming South Africa’s commitment to a conclusion of the US trade deal.
According to the release, Tau says the intersection of geopolitical, domestic and trade issues best defines the current impasse between South Africa and the US, and a reset is unavoidable.
“South Africa took the decision not to retaliate to the reciprocal tariffs announced by the US. We also want to reiterate that we have no intention of decoupling from the US either. Our view is that negotiations remain the best tool to deal with the issues that are on the table.”
He says South Africa is not in a unique position as the US attempts to finalise negotiations with some 185 countries around the world by Friday. “We remain committed to the cause as we await substantive feedback from our US counterparts on the final status of our framework deal.”
ALSO READ: Blaming Ramaphosa for US trade penalties misses the point
Features in US trade deal
Tau says the deal featured a number of areas, including but not limited to:
- Importing 75 –100 petajoules of Liquified Natural Gas for 10 years, unlocking $12 billion
- Agricultural market access by simplifying US poultry exports under the 2016 tariff rate quota and unlocking approximately $91 million in trade. There is also readiness to open market access for blueberries, subject to necessary protocols.
- South African firms committed to invest $3.3 billion in US industries, such as mining and metals recycling, while both governments agreed to pursue joint investment in critical minerals, pharmaceuticals and agri-machinery.
- Exemption of specific sectors from reciprocal tariffs to preserve supply chains, such as shipbuilding, counter-seasonal agriculture trade, and exports from MSMEs of less than $1 million per year.
He says his department has been in a period of intense negotiations with the US and signed a condition precedent document and readied its inputs for entry into the US template it is waiting for.
ALSO READ: Wait-and-see to Trump’s hardline
Reset in relationship after new US tariff
“Despite the challenges presented by this period, we put our best foot forward, bringing together the subject specialists within our ranks who dug deep to ensure that our country is adequately prepared for a number of potential scenarios.
“We planned for these scenarios and did not sit 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.”
Tau says the way forward is clear. “President Ramaphosa expressed our willingness to reset the trade relationship with the US and develop a solution which is mutually beneficial. The DTIC has made this issue an apex priority since well before 2 April 2025. We will not waver in our mission to ensure we make South Africa prosper.”
Experts were quite vocal earlier in the day when the DTIC still refused to comment due to the “sensitivity” of the issue.
ALSO READ: Experts warn South Africa cannot afford tariff showdown
Nothing new in government’s US tariff plan
Donald MacKay, CEO of XA Global Trade Advisors, questioned whether anybody, including Donald Trump, knows what will happen on Friday. He said it probably depends on how Trump feels when he wakes up. He expects that the tariff for South Africa will remain at 30%.
“I hope I am wrong, but it is not obvious to me that there is anything we are offering in return that Trump was concerned about.
“He wants things that have nothing to do with trade, as his decision to slap a 50% tariff on goods from Brazil because the government did not want to stop the prosecution of the previous president and friend of Trump, Jair Bolsonaro, shows.”
Mackay points out that the president visited the White House, while many other groups also travelled to Washington and returned with all kinds of stories. “But I have no idea. I would feel better if we had an ambassador in the US, as it would have been important for such a large trading partner, but clearly the president disagrees.”
ALSO READ: Trump tariffs unsettle SA farmers as Africa eyes agricultural growth
This is who will suffer most from 30% US tariff
He says the implications of the 30% tariff vary. Exporters of fresh fruit, mainly citrus and table grapes, will suffer. “They are worried and have a right to be worried. I wish government were better at communicating what is happening to everyone.
“Saying nothing creates even greater anxiety. People do not understand what is happening and how good or bad the situation is. I am not too optimistic that we do have a plan. I desperately want to believe that we do, but it feels to me as if we did have a plan, we would be better at communicating it. The problem is that the US is not communicating either.”
After seeing the press release, MacKay says it tells us nothing new.
Proffssor Jannie Rossouw, visiting professor at the Wits Business School, also did not believe that South Africa has a plan, calling it a significant economic obstacle.
“We do not have an ambassador in the US, and Mcebisi Jonas could also not fulfil his role. The fallout will be significant, with the governor of the Reserve Bank, Lesetja Kganyago, saying it could cost us 100 000 jobs.”
ALSO READ: Devastating impact of US tariffs on SA automotive sector even before implementation
Economist expects South Africa will be stuck with 30% US tariff
Maarten Ackerman, chief economist at Citadel, also expects that the 30% US tariff on South African imports will come into effect on Friday. “Unfortunately, there is not enough time to implement changes before the deadline. While trade negotiations between South Africa and the US are ongoing, current indications suggest that the US is prioritising discussions with larger trading partners, such as the European Union.”
He says they remain optimistic that a trade agreement with the US will eventually be reached. “However, from Friday onward, South African exporters will begin to feel the pressure. It is worth noting that only around 7% of South Africa’s exports are destined for the US, and roughly half of that, mainly gold and platinum, will be exempt from the new tariffs.
“The other half, including key exports, such as citrus, will be subject to the full 30% duty, while the automotive sector will be subject to the 25% sectoral tariff.”
Ackerman expects that the tariffs will present a meaningful headwind for South Africa’s economy until new negotiations yield results. “This is one of the contributing factors behind our expectation that growth will remain below 1% this year, significantly lower than the National Treasury’s initial 1.45% projection.”
Could government have done more to prevent this? He says it is a complex scenario. “Delegations have already travelled to Washington, but the global trade environment remains tense and highly politicised. Most countries find themselves in a “wait and negotiate” phase.
“On a positive note, following the president’s recent visit to the White House, both governments appear committed to pursuing a long-term trade agreement.”
ALSO READ: US tariff of 30% on SA exports: where to now?
The clock is ticking – rather find other markets
Dr Ernst van Biljon, head lecturer and programme coordinator for M. Com in supply chain management at the IMM Graduate School, said the 30% US tariff hike on South African goods is not just a trade policy decision but a major disruptor for our export economy and supply chains.
“Key sectors like agriculture, automotive and processed goods will face sharp margin pressure and potential loss of competitiveness in a market where price elasticity is critical.”
However, he says, retreat is not an option. South African exporters must now diversify both markets and supply chain strategies, including expanding into fast-growing Asian and Middle Eastern regions, accelerating value-add at source to avoid raw product tariffs and investing in digital supply chain tools to build flexibility and cost-efficiency.
Van Biljon says at a national level, deeper engagement with AfCFTA, targeted logistics investment and stronger trade alliances through Brics should help. “If we act decisively, this crisis could become a catalyst to rewire our trade strategy for greater resilience. But the clock is ticking.”
And the rand heads for R18/$ again
The result of all this uncertainty around the US tariff leads to uncertainty that is already evident in the rand: last Wednesday it was still trading at R17.55/$ but jumped to R17.96/$ this afternoon.
ALSO READ: Trump’s new 30% tariff less about trade and more about power
Annabel Bishop, chief economist at Investec, says the impact of tariffs on the domestic currency, if a trade deal is not reached with tariffs around 15% would be negative, as South Africa would lose competitiveness, particularly motor vehicle and food exports to the US, reducing export activity.