Lamola outlines the impending 30% tariff on South African imports

Minister of International Relations and Cooperation, Ronald Lamola, has announced the government's strategy to address the impending 30% US tariff, effective this week.

Speaking to the media on Monday, Lamola emphasised South Africa's commitment to strengthening its trade and investment ties with the US since the beginning of the 7th Administration.

"However, recent developments suggest that despite ongoing negotiations and strategic frameworks proposed by South Africa, the US has decided to implement a 30% unilateral tariff on South African imports, a significant move that threatens to destabilise these vital economic exchanges," he said. 

Lamola explained that the unilateral tariff decision comes as both countries engage in discussions designed to resolve long-standing bilateral issues aiming to foster predictability in trade.

He said South Africa submitted a comprehensive Framework Deal in May, which proposed ways to address the US trade deficit, promote digital trade, enhance investment opportunities, and eliminate non-tariff barriers.

"Nevertheless, these efforts seem to have been undermined, much to the dismay of the South African government, which views them as detrimental to the intended reset of relations with the US," Lamola said.

"The upcoming tariff regime, effective from 12:01 am on August 8, applies broadly to foreign imports, affecting various trading partners. Importantly, any goods loaded for transit before the start date will remain subject to the lower 10% tariff, relieving some immediate pressures.

"However, this newfound uncertainty has economic analysts estimating a potential reduction of 0.2% in South Africa's economic growth, contingent upon the country's ability to seek alternative markets," the minister said. 

He said as South Africa's third-largest trading partner, after the European Union and China, the US accounts for 7.5% of South Africa’s total global exports.

"Yet, alarmingly, South Africa holds a mere 0.25% share of total US imports. The implications of this 30% tariff appear imprudent, especially given the non-threatening nature of South Africa's exports to US industries. In fact, South African agricultural products work synergistically to fill gaps in the US market, rather than act as direct competitors, contributing positively to the American industrial infrastructure," he said.

Despite the impending challenges, the South African government is committed to navigating this turbulent trade landscape through a variety of strategic response measures:

• Continuation of Negotiations: Emphasising a principled approach, South Africa will pursue diplomatic channels to secure a trade deal that respects national interests while fostering partnership.
• Economic Response Package: Key elements include the establishment of an Export Support Desk, focusing on alternative market access and resilience strategies for affected businesses.
• Block Exemption for Exporters: Intended to promote industry collaboration amidst the new tariffs, this policy allows for shared infrastructure and market coordination.
• Diversification of Markets: Actively cultivating partnerships with various global trade partners, South Africa aims to tap into emerging markets across Africa, Asia, Europe, and the Americas.

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