South Africa Eyes New Trade Allies as US Tariff Threat Looms

South Africa’s government is intensifying efforts to diversify its global trade relationships as a new wave of tariffs from the United States threatens to upend existing economic ties.

US President Donald Trump’s sweeping 10% levy on global imports, including a steep 25% duty on vehicle imports, has rattled key export sectors and placed South Africa’s trade surplus with the US under threat. Although South Africa has secured temporary exemptions for some goods, officials are bracing for long-term fallout.

The US is South Africa’s second-largest bilateral trading partner, and in 2024, the country exported R156.84 billion worth of goods to the US. That trade relationship has historically been underpinned by the African Growth and Opportunity Act (AGOA), which gives preferential access to American markets.

But with the new tariffs, “AGOA benefits have essentially been nullified,” said Minister of International Relations and Cooperation Ronald Lamola.

Building a Strategic Defense

In response, the South African government is mobilizing a multi-pronged trade strategy. Lamola and Trade, Industry and Competition Minister Parks Tau have both stressed the importance of economic resilience and the need for greater fairness in global trade governance.

“We will intensify efforts to diversify export destinations, targeting markets across Africa, Asia, Europe, the Middle East, and the Americas,” Lamola said during a recent briefing.

One of the key pillars of this strategy is increased engagement with the African Continental Free Trade Area (AfCFTA), which offers a vast market for South African goods. Government is also eyeing new bilateral agreements with countries in Asia, the EU, and Latin America.

Tau echoed these plans, calling for the reform of the World Trade Organisation (WTO) and greater multilateral cooperation. “We are advocating for a trade system that is both fair and transparent,” he said.

Why Diversification Is Critical

South Africa posted a strong trade surplus of R196.1 billion in 2024, up from R130 billion in 2023, but this momentum may not be sustainable if the US trade relationship deteriorates.

The SARS data shows just how uneven South Africa’s trade exposure is:

China remains South Africa’s biggest trade partner in absolute terms—importing R219.88 billion worth of South African goods—but the trade deficit with China remains wide at R179 billion.

In contrast, the US trade relationship currently yields a surplus of R36 billion, which could quickly evaporate under the weight of new tariffs.

Target Markets for the Future

The government’s diversification strategy includes increasing exports to:

• Mozambique – R119.15 billion in 2024 exports

• Germany – R154.24 billion

• United Kingdom – R99.99 billion

• India and Thailand, where trade relations are growing

Certain industries such as pharmaceuticals, semiconductors, and energy products have been granted US tariff exemptions, but others—including automotive, agriculture, processed foods, chemicals, and metals—are expected to suffer.

What’s Next?

As the United States seeks to “reset the global trade table,” South Africa must rethink its economic diplomacy and accelerate trade talks with non-traditional partners.

“The only way to shield our industries from volatility is to deepen continental integration and tap into emerging global markets,” said Lamola.

Whether South Africa’s strategy will be enough to weather the coming trade storm remains to be seen. But one thing is clear: the country is no longer waiting for the world to play fair—it’s drawing up new trade blueprints to shape its own future.

{Source: BusinessTech}

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