As South Africa commemorates Freedom Month, we are reminded that our democracy is not only a political project — it is also an economic programme. Our country’s journey to freedom has always been intertwined with the pursuit of economic inclusion, leveraging global opportunities, and social partnerships rooted in mutual respect.
Over the years, we have built strong, multifaceted economic ties with many countries, including the US. Long before I assumed my role as the executive authority at the department of trade, industry & competition, American companies were investing in South Africa’s potential, while South African firms made their mark across the US. This reflects a reciprocal relationship marked by shared ambition, strategic vision and a joint commitment to prosperity on both sides. This is a living example of inclusive economic diplomacy (IED) as prioritised by the seventh administration’s strategic approach.
Despite recent concerns emerging from Washington, South Africa views our bilateral relationship as more than transactional. Platforms such as the American Chamber of Commerce provide vital spaces for dialogue and collaboration, enabling us to bridge understanding, clarify our priorities and reaffirm our commitment to building a resilient, inclusive economy. It is encouraging that we continue to enjoy the support of the US business community in South Africa as we navigate these new dynamics in the global trading system.
In 2023 alone, US foreign direct investment (FDI) into South Africa reached R165bn, supported by R1.7-trillion in American portfolio investments. These are significant figures, and they speak to enduring confidence in our economy. However, what is equally noteworthy — and often overlooked — is the growing South African investment footprint in the US.
Between 2019 and 2023, South African firms invested more than R1.04-trillion into the US, outpacing US FDI flows into South Africa over the same period. This is not an accident. It reflects the competitive edge and global mindset of our firms, particularly in sectors such as metals and minerals, paper and packaging, ICT services and chemicals.
Flagship South African companies like Sasol, Sappi and Instacom have successfully expanded into US markets, leveraging local strengths to create shared value. On the American side, ICT and software giants — Microsoft, Google, Amazon Web Services, Cisco, Oracle, IBM — are not only investing in South Africa but also accelerating innovation, job creation and skills development.
American manufacturing stalwarts such as Ford, PepsiCo and Coca-Cola continue to view South Africa as a priority market, reinforcing the country’s attractiveness as a regional investment gateway.
The agricultural sector also illustrates the depth of our trade relationship. The US accounts for 4% of South Africa’s agricultural exports, valued at R265m in 2024, with key products such as citrus, grapes, wine, juices and nuts benefiting from duty-free access. However, renewed tariff uncertainty and growing competition from Chile, Brazil and Australia pose real challenges for our producers. We remain committed to addressing these concerns with urgency and clarity. But our response must be considered. Given that South Africa has a fairly small and open economy, we are more acutely affected by shifts in the geopolitical landscape.
While we are deeply concerned about the recent reimposition of tariffs ... we remain committed to constructive engagement. We are ready to navigate this new trade environment with the innovation, precision and diplomacy it requires
Strong investment figures, however, must be matched by a supportive economic environment. For South Africa, that means tackling long-standing infrastructure backlogs and removing the regulatory bottlenecks that stifle growth.
Our infrastructure constraints — in energy, transport and water — are well known. But what is perhaps less known is how vigorously we are now addressing them. Operation Vulindlela, a joint initiative between the Presidency and the National Treasury, is focused on structural reforms that will unlock private sector investment, improve freight and logistics, and strengthen energy security. These reforms are laying the foundation for an efficient, investment-ready economy.
Which brings us to our next message: regulation is not the enemy of growth. If designed wisely, it can be a driver of inclusive development. In South Africa, our policy framework — particularly broad-based BEE and employment equity — is aimed at correcting historical injustices and ensuring equitable participation in the economy. As I have always maintained, there can be no meaningful social cohesion and nation formation without addressing these past and present injustices.
We recognise that, for multinational corporations, navigating these frameworks can be complex. That’s why we’ve introduced the equity equivalent investment programme (EEIP), which allows qualifying foreign firms to meet BBBEE requirements through alternative investments in empowerment initiatives.
This is smart regulation in action.
Take the example of Ford’s contribution to the Automotive Industry Transformation Fund, or JPMorgan’s backing of the Abadali Fund, managed by a black-owned asset manager. Citibank’s investment into the Vaal Special Economic Zone, structured under EEIP, exemplifies how regulatory compliance and strategic business objectives can align to generate long-term value.
These are not isolated cases. They reflect a deliberate strategy to position regulation as an enabler — not a barrier — to economic dynamism. The key lies in designing policies that are consultative, flexible and tailored to the realities of doing business today, while ensuring that we never renege on our commitment to addressing our past injustices.
As we move into a new chapter of global economic reconfiguration — marked by rising trade tensions and geopolitical shifts — we must not retreat into protectionism or unilateralism. Rather, we must double down on co-operation and making IED a non-negotiable to deal with polycrises. South Africa’s G20 presidency offers an opportunity to showcase our capabilities, advocate for a fairer trading system and advance a collective vision for sustainable development. It also offers us an opportunity to look for alternative markets and diversify our export opportunities to de-risk our current trade relationships.
While we are deeply concerned about the recent reimposition of tariffs under section 232 on steel, aluminium, automobiles and auto parts by the US — which undermines the spirit of the African Growth and Opportunity Act (Agoa) and affects the sub-Saharan region as a whole — we remain committed to constructive engagement. We are ready to navigate this new trade environment with the innovation, precision and diplomacy it requires.
We invite US business leaders to continue walking this journey with us. We need to reset in order to deepen our ties, overcome shared challenges and co-create solutions that promote sustainable, inclusive growth. The future of US—South Africa economic relations depends not just on how we trade, but how we trust — and invest — in one another.
• Tau is minister of trade, industry & competition. He made the above remarks at the American Chamber of Commerce in South Africa's AGM recently.
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