South African companies are already starting to face the impact of Trump’s tariffs, with one losing R750 million in contracts.
President Cyril Ramaphosa is warning that South Africa must adapt quickly in a turbulent trade environment as US tariffs come into effect this week.
South African companies are already starting to face the impact, with one losing R750 million in contracts over the weekend.
Trump ordered the reimposition of 30% tariffs on dozens of trading partners, including South Africa, on Thursday – his cornerstone strategy for reshaping global trade to benefit the US economy.
US engagement
Writing in his weekly newsletter on Monday, Ramaphosa said the decision by the United States to impose a 30% tariff on South African imports “highlights the urgency” with which the country has to adapt to increasingly “turbulent headwinds in international trade”.
“As a government, we have been engaging the United States to enhance mutually beneficial trade and investment relations. All channels of communication remain open to engage with the US.
“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,” Ramaphosa said.
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Helping producers
Ramaphosa added that in an effort to “help” producers and exporters aggressively explore alternative markets, the government has established an Export Support Desk to assist affected producers.
“We will, in due course, be announcing the modalities of a support package for companies, producers and workers that have been rendered vulnerable by the US tariffs.
“This intervention will also play a key role in guiding industries looking to expand into new markets in the rest of Africa, Asia, the Middle East and markets we already have trade agreements with,” Ramaphosa said.
New markets
Ramaphosa said strengthening regional value chains will be key to building resilience for the country’s export markets in the longer term.
He said the pressure of the US tariffs presents the country with an opportunity to push forward with the implementation and expansion of the African Continental Free Trade Area.
“Reducing over-dependence on certain markets is a strategic imperative to build the resilience of our economy. It will also enable us to expand the frontiers of opportunity for South African businesses, goods and services.
“In the coming months, we will be scaling up our trade missions into new markets in Africa and beyond, as well as the National Exporter Development Programme, whose aim is to grow the pool of export-ready companies,” Ramaphosa said.
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SA not alone
Ramaphosa added that South Africa is not alone in facing high tariffs from the US, saying the international trading system is changing.
“Complacency will not serve us, and building resilience is imperative. As government we remain committed to ongoing engagement with the US and building trade resilience,” Ramaphosa said.
The rand fell to its lowest level in three months after Trump’s announcement last week.
The US president also warned of slapping an additional 10% on the Brics nations and any other economy aligned with the grouping.
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