South Africa is preparing for significant diplomatic engagements with the United States following the hefty 31% reciprocal tariffs announced by President Donald Trump, which have effectively nullified the African Growth and Oppotunity Act (Agoa) benefits.

This engagement is crucial as the South African government seeks to understand the implications of the new trade policies and formulate an appropriate response.

Minister of Trade, Industry and Competition, Parks Tau, on Friday said the initial delays in the visit to the US were strategic, intended to coincide with expected announcements concerning global trade and tariffs.

“We thought it was important that when the announcement is made, we assimilate the information and respond accordingly,” Tau said.

“Our approach has always been to engage with the US, to find solutions and resolve problems rather than reacting with comments or decisions that might be counterproductive.”

Tau emphasised the importance of understanding the broad implications of any US trade policies and invited a comprehensive dialogue rather than unilateral retaliatory measures that may escalate into a "race to the bottom."

He said the aim was to nurture mutual benefits in the context of South Africa's developing economy while maintaining robust trade relationships.

Key areas of focus in these discussions will include a revival of the Trade and Investment Promotion Agreement (T-bar) and ongoing engagement on trade issues, particularly those related to agriculture, where specific products like citrus, pork, and dairy are on the agenda.

“We still want to talk about a bilateral engagement on our trade issues with the US,” Tau said, underscoring the significance of tackling specific challenges that affect sectors critical to South Africa's economy.

The reality of trade with the US cannot be overlooked as a substantial 75% of trade is conducted under Most Favoured Nation status, highlighting the stakes involved in these upcoming discussions.

As both nations navigate their evolving economic landscapes, Tau acknowledged South Africa's reciprocal role as an investor in the US market, with strong representation of South African companies listed on US exchanges.

In light of the newly imposed tariffs, Tau said sectors such as automotive and agriculture will require strategic responses and thus it was essential for the government to identify the industries that will be disproportionately affected and to engage in collaborative discussions around mitigating potential impacts.

“There are specific regions that will be more disproportionately affected,” Tau said.

The announced tariffs have seen widepsread public protests in all states in the US and in major cities across Urope

The International Monetary Fund (IMF) said it was still assessing the macroeconomic implications of the announced tariff measures, but added that they clearly represented a significant risk to the global outlook at a time of sluggish growth.

“It is important to avoid steps that could further harm the world economy. We appeal to the United States and its trading partners to work constructively to resolve trade tensions and reduce uncertainty,” said Kristalina Georgieva, managing director of the IMF.

“We will share the results of our assessment in the World Economic Outlook, which will be published at the time of the IMF/World Bank Spring Meetings later this month.”

Looking ahead, the South African government encouraged a spirit of collaboration with the US, particularly at the upcoming Agoa Summit in Washington D.C., which is set to emphasise the importance of continued trade partnerships.

Minister of International Relations and Cooperation, Ronald Lamola, said South Africa's comprehensive strategy to mitigate the economic impact of the tariffs should focus on export diversification, value-added production, and strengthening regional trade partnerships.

These include negotiating favourable trade agreements with the United States; leveraging the African Continental Free Trade Area (AfCFTA) to boost intra-African trade; and prioritising high-value manufacturing to reduce tariff exposure.

“The new tariff regime arising from the decision by the United States of America, which have been directed not only to South Africa, but the entire world, necessitates strategic responses to maintain and grow our industrial base, as a crucial avenue to pursue inclusive growth,” Lamola said.

“We will intensify efforts to diversify export destinations, targeting markets across Africa, Asia, Europe, the Middle East, and the Americas.”

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