By Michelle van der Spuy
The 90-day grace period before America’s sky-high import tariffs come into effect, ends on July 8. South Africa is one of the African countries calling for this reprieve to be extended.
If this temporary suspension announced by President Donald Trump on April 9, is not extended, a 30% import tariff will soon be levied on the US’s imports of products from South Africa.
According to a statement by the South African Department of Trade, Industry and Competition, its Deputy Minister, Zuko Godlimpi, had a discussion with Connie Hamilton, the US Assistant Trade Representative for Africa, at the US-Africa Summit in Luanda, Angola, on June 24.
The statement added that this discussion dealt with South Africa’s proposed framework agreement with the US that was tabled on May 20. This agreement contains guidelines to improve mutually beneficial trade and investment relations with the US.
Pres. Cyril Ramaphosa discussed the agreement with Pres. Donald Trump in Washington on 21 May.
“The framework agreement gives attention to, among other things, America’s concerns about trade restrictions that are not related to tariffs, as well as shortcomings in the trade balance and commercial relations,” the statement said.
“It aims to resolve issues of market access in the interest of both countries and to encourage bilateral investments in a mutually beneficial manner.”
In the proposed framework agreement, South Africa requests that some important export products, such as cars and car parts, as well as steel and aluminium, be exempted from US import tariffs through the use of tariff rate quotas instead.
South Africa further requests that a maximum import tariff of 10% be levied on South African products, and that small and medium-sized enterprises that supply out-of-season products and that manufacture products that America cannot, be exempted from import tariffs.
In his conversation with Hamilton, Godlimpi pointed out the impact that the sharp increase in America’s import tariffs will have on African countries in particular. In this regard, Hamilton indicated that America is currently drafting a profile that will form the basis for all its trade relations with sub-Saharan African countries going forward.
The details of this will be made public once it has gone through the necessary steps within the US government.
In light of this, South Africa and other African countries have asked for an extension to the 90-day grace period before the high import tariffs come into effect. This is reportedly to allow these countries time to propose new trade agreements that will be in line with the US’s new approach.
“We encourage South African industries to exercise strategic patience and to not make hasty decisions. The government will continue to use every possible avenue to engage with the US government to find a beneficial solution that will protect South Africa’s interests in the US market,” said Parks Tau, Minister of Trade, Industry and Competition.
Future of AGOA
Meanwhile, John Steenhuisen, Minister of Agriculture, says it is clear that the US’s AGOA (African Growth and Opportunity Act) agreement in its old format and the exemption from US import tariffs it offers, are a thing of the past.
According to him, tariffs will be an important aspect “if or when” the agreement is renewed in September this year.
Steenhuisen says his department is still trying to get the US to reduce its imminent high tariffs on agricultural products imported from South Africa. However, he reminds that South Africa’s agricultural producers have long been advised to diversify their export destinations. Furthermore, creating access to new exports markets is a priority for Steenhuisen’s department so that South Africa’s agricultural producers have alternatives when obstacles arise in their traditional markets.
The South African government is currently working with the country’s private sector to explore markets in certain countries in the East and in the Middle East.
