The South African government is edging closer to clinching a historic trade deal with the US, after Washington this week finally sent through a detailed response to a trade proposal from Pretoria that was dispatched months ago.
Though South African officials stopped short of describing the progress as a breakthrough, the fact that the two sides are at last negotiating details offers new hope after months of acrimony sparked by US President Donald Trump’s imposition of 30% tariffs on South African goods — a reaction to what he described as a “white genocide” in South Africa.
Minister of trade, industry & competition Parks Tau struck a cautious note in an interview with the Sunday Times yesterday. At the same time, he intimated that the country would also “nurture” its trade relations with African countries, China and India, among others.
Though the details of the US response have been deemed highly “sensitive”, Tau said the response in itself was progress.
“We measure progress on the basis of the fact that we are now engaged in text,” he said. “We’ve had discussions that are beginning to elaborate on what the text means. We’ve agreed to a revised text for consideration, and that’s where we are in terms of what we will be discussing with them.
“I met with the US state representative, and we agreed that on the basis of the discussion that had taken place, the US will send a revised document, which they sent to us in the past week.”
The talks in the US took place a week before the expiry of the African Growth and Opportunity Act (Agoa), which grants several African countries preferential access to the US market — a deal which has hugely benefited South Africa. Agoa exports are estimated to amount to R71.5bn, which is 46% of total South African exports to the US.
However, Trump’s punitive tariffs nullify Agoa’s benefits and threaten thousands of jobs in South Africa’s agriculture and automotive sectors.
The US is South Africa’s second-largest trading partner, with total trade of $15.1bn (about R262bn) in 2024. The country exported goods worth $8.2bn to the US and imported products valued at $6.9bn.
In New York this week, President Cyril Ramaphosa made a plea for Agoa to be extended, warning that its expiry threatens to undermine the foundations of US-Africa trade and undo progress made in the past 25 years.
“In South Africa, [Agoa] has supported jobs, from auto-assembly plants to high-tech manufacturing hubs,” Ramaphosa told the South African-US Trade and Investment Dialogue, which took place at the UN General Assembly.
Africa remains our most important trading partner. That’s where the bulk of our product goes
— Parks Tau, minister of trade, industry & competition
He said Agoa access was critical, not only for South African companies, but also for the more than 600 US companies operating in South Africa, in areas as diverse as aerospace, mining and energy, consumer goods, and finance.
The president said punitive tariffs on South African goods had already disrupted supply chains and created uncertainty for South African exporters and US importers.
“We understand the concerns that have been raised by the US and are willing to engage to find solutions that are mutually beneficial,” he told the dialogue. He also welcomed the establishment of a South African-US trade and investment forum to take place in South Africa next year.
In a separate address after his appearance at the UN, Ramaphosa told the Council on Foreign Relations that South Africa is seeking to maintain its relationship with the US while deepening its outreach to Asia.
He also took aim at Trump during his address to the UN General Assembly, saying trade “is now being used as a weapon against a number of countries”.
When Trump announced he would impose a 30% tariff on South Africa, Pretoria immediately started seeking an audience with Washington for negotiations on lowering the tariffs, but to no avail. This triggered panic in the country, with those exporting goods to the US fearing a jobs bloodbath if there was no intervention.
But South Africa’s fortunes appeared to have changed on Monday, ahead of the UN General Assembly meeting, when Washington finally responded “with text” to Pretoria’s proposal. “And we’ve started getting teams to work on it, so that we are able to respond. At the point of our response, the intention is that we can then start negotiations,’’ Tau told the Sunday Times.
He said they were looking at sending through the revised offer in the next two weeks, after taking it through the cabinet. It is this document that would set in motion the negotiations concerning the possibility of the US lowering its tariffs.
“Lowering tariffs is the [hoped-for] result of the negotiations,” he said. “We anticipate that it would be after cabinet, so it would be slightly more than two weeks, because we have to go to cabinet. It’s about two-and-a-half weeks if the time frame works well. And then we’ll give an official response, on which basis they will indicate the way forward. However, the intention is that we would then launch into negotiations.”
Tau said he viewed the response from the US as a step in the right direction — though the negotiations, likely to be held before the end of October, "would not be easy”.
"We will send back the document, [and] they will then have to say, ‘Well, how do they interface with our response?’ If we get to the point where we agree the text is now ready for negotiation, we will then go back. We will send a team to then go and do the discussions.
“And as with any negotiation, it’s not an easy process. The discussions will be difficult. Ultimately we have to work towards an outcome that does not, if you will, compromise South Africa. So we have to work in the national interest. But you would know the US public posture on these issues has been — well, they believe they’ve been at a disadvantage and seek to reverse what they consider [has] been negative to the US economy. So they come at it from their point of view, and we have to come at it from our point of view.”
However, even as a deal with the US seems likely, Tau said he wanted to emphasise there had been deliberate efforts to strengthen trade relations with African states.
He said while the US remains an important market, it would not be all doom and gloom if the deal did not go through. There were sectors that would be badly affected if this were the outcome, but not everything would collapse, he added.
“The US is an important market, and they remain a globally important economic player. But you have to drill down sector by sector, industry by industry, firm by firm to arrive at the conclusion that in this sector this is the percentage of product I will sell into the US [and] this is the percentage of product that will go to other markets.”
Tau maintained that Africa remained South Africa’s most important trading partner, as bulk products manufactured in the country were mostly sent to neighbouring states. This, he said, was a much-understated fact.
“Africa remains our most important trading partner. That’s where the bulk of our product goes. So you have to nurture that market [and] ensure it grows. The amount of effort we make as regards the African Continental Free Trade Area agreement and [the amount we] export to the African continent is important. Trade with our sister countries is important,” he said.
“Now, we don’t always make that statement because maybe we take it for granted, but you can go to many shop floors in countries in the region and you’ll see the amount of South African product [there].
“So I say again that we can never underestimate the importance of the US as a country, as a trading partner. And ultimately it is our second-largest trading partner [when it comes to] individual countries. But on the other hand, you can’t say the impact will be the same across the sectors.”
Tau also seemed to suggest there was an appetite to extend Agoa beyond its end date on Tuesday. However, he said the decision would ultimately be made by the US Congress.
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