US's 30% tariff on SA exports will hit 30,000 jobs

The government says 30,000 jobs are likely to be affected by the 30% tariff imposed by the US on SA exports.

This was revealed by the director-general of the department of trade, industry and competition, Simphiwe Hamilton, during a joint media briefing with the department of international relations and co-operation on Monday.

“We base this on the ongoing consultation that we have with all the sectors of the economy — from automotive to agriculture — and all the other sectors that are going to be affected, and at this stage, we are sitting at approximately 30,000 jobs that could be affected by this,” Hamilton said.

SA faces the highest tariff rate in Sub-Saharan Africa, and from August 7, products exported to the US will be subjected to the 30% levy.

During the briefing, international relations minister Ronald Lamola said the government had been strengthening trade and investment partnerships with various global partners.

He said those efforts were starting to bear fruit with the focus on markets across Africa, as well as in Asia, Europe, the Middle East, and the Americas.

“Our announcement on the Clean Trade and Investment Partnership with the European Union in March has unlocked a R90bn investment package that has been initially committed,” Lamola said.

“This [partnership] also aims to unlock new market access opportunities for SA, including the export of sustainable aviation fuel by Sasol and the exports of hybrids and electric vehicles.

“While facing global trade challenges, SA is proactively building a more resilient agricultural sector. We’ve made significant progress in opening up vast new markets, like China and Thailand, securing vital protocols for products like citrus and others. With China alone being a $200bn market, we are confidently expanding our reach and creating new opportunities for our agricultural producers.”

Lamola said the government had not been idle but was proactively and collaboratively working to diversify SA’s trade portfolio.

In his weekly newsletter, President Cyril Ramaphosa said the US’s decision to impose the 30% tariff on SA imports highlighted the urgency with which the country must adapt to the increasingly turbulent conditions in global trade.

Ramaphosa said the US was SA’s second-largest trading partner by country, and the tariff measures would significantly affect industries that depend heavily on US-bound exports, along with the workers they employ and the effect on the national fiscus.

“Domestic sectors such as agriculture, automotive and textiles have historically benefited from duty-free access to the US market under the African Growth and Opportunity Act.

“Our trade relations have historically been complementary in nature,” Ramaphosa said. “South African exports do not compete with US producers and do not pose a threat to US industry. It remains our aspiration that this should continue.

“Largely, our exports are inputs into US industries and therefore support the US’s industrial base. SA is also the biggest investor from the African continent into the US, with 22 of our companies investing in a number of sectors including mining, chemicals, pharmaceuticals and the food chain.”

Ramaphosa said government had been engaging with the US to enhance mutually beneficial trade and investment relations, and that all communication channels remained open.

“Our foremost priority is protecting our export industries. We will continue to engage the US in an attempt to preserve market access for our products. We must also accelerate the diversification of our export markets, particularly by deepening intra-African trade,” he said.

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