President Cyril Ramaphosa says a negotiation team has been tasked with engaging the United States regarding the Framework Deal, following the 30% trade tariff imposed on South Africa.
The Framework Deal, submitted in May, will address the issues initially raised by the US, including SA’s supposed trade surplus, unfair trade practices and lack of reciprocity from the US.
US President Donald Trump announced on Monday, 7 July, that SA and several other countries would be subject to the tariff increase.
Ramaphosa stated that the tariff hike is based on a particular interpretation of the trade balance between South Africa and the US. He added that discussions on the tariffs are underway between the negotiating teams from both countries.
RAMAPHOSA SAYS DATA IS INCORRECT
The president also argued that the 30% reciprocal tariff does not accurately reflect the available trade data. He said that, according to official figures, the average tariff on imported goods entering South Africa is 7.6%.
Ramaphosa further noted that 56% of goods enter South Africa duty-free, with 77% of US goods entering the local market at 0%. He emphasised that SA will continue its diplomatic efforts to pursue a more balanced and mutually beneficial trade relationship with the US.
WHAT IMPACT WILL US TARIFFS HAVE ON SA?
According to Standard Bank, the tariffs could raise the cost of South African products in the US and reduce demand. This may negatively affect retail sales, impacting consumers, employees, and businesses in both countries.
However, the bank noted that the new US tariffs present a short-term challenge. It believes SA is well-positioned to weather the impact. This is thanks to diversified export markets, a relatively resilient economy, and ongoing efforts to expand trade into new regions.
WILL SOUTH AFRICA’S STRATEGY BE ENOUGH TO REVERSE THE TARIFF BLOW?
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 11.
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