Minister Lamola spells out government's plan to tackle looming US tariffs

Minister Ronald Lamola outlined government's plan to tackle the looming US tariffs. 

IOL has widely reported that US President Donald Trump has slapped SA with a 30% tariff set to come into play this week.

Addressing the media on Monday, Lamola said since the onset of the 7th Administration, South Africa has diligently aimed to stabilise and elevate its mutually beneficial trade and investment relationships with the United States.

"However, recent developments suggest that despite ongoing negotiations and strategic frameworks proposed by South Africa, the US has decided to implement a 30% unilateral tariff on South African imports, a significant move that threatens to destabilise these vital economic exchanges," he said. 

Lamola explained that this unilateral tariff decision comes as both countries engage in discussions designed to resolve long-standing bilateral issues aiming to foster predictability in trade.

He said South Africa submitted a comprehensive Framework Deal in May 2025 which proposed ways to address the US trade deficit, promote digital trade, enhance investment opportunities, and eliminate non-tariff barriers.

"Nevertheless, these efforts seem to have been undermined, much to the dismay of the South African government, which views them as detrimental to the intended reset of relations with the US," Lamola stated.

"The upcoming tariff regime, effective from 12:01 am on 8 August 2025, applies broadly to foreign imports, affecting various trading partners. Importantly, any goods loaded for transit before the start date will remain subject to the lower 10% tariff, relieving some immediate pressures.

"However, this newfound uncertainty has economic analysts estimating a potential reduction of 0.2% in South Africa's economic growth, contingent upon the country's ability to seek alternative markets," the Minister said. 

He said as South Africa's third-largest trading partner, after the European Union and China, the US accounts for 7.5% of South Africa’s total global exports.

"Yet, alarmingly, South Africa holds a mere 0.25% share of total US imports. The implications of this 30% tariff appear imprudent, especially given the non-threatening nature of South Africa's exports to US industries. In fact, South African agricultural products work synergistically to fill gaps in the US market, rather than act as direct competitors, contributing positively to the American industrial infrastructure," he said.

Despite the impending challenges, the South African government is committed to navigating this turbulent trade landscape through a variety of strategic response measures:

• Continuation of Negotiations: Emphasising a principled approach, South Africa will pursue diplomatic channels to secure a trade deal that respects national interests while fostering partnership.
• Economic Response Package: Key elements include the establishment of an Export Support Desk, focusing on alternative market access and resilience strategies for affected businesses.
• Block Exemption for Exporters: Intended to promote industry collaboration amidst the new tariffs, this policy allows for shared infrastructure and market coordination.
• Diversification of Markets: Actively cultivating partnerships with various global trade partners, South Africa aims to tap into emerging markets across Africa, Asia, Europe, and the Americas.

The impending tariffs signal a stark departure from a low-tariff environment, generating uncertainty in trade relationships not just for South Africa but globally. Nonetheless, with strategic initiatives being rolled out, including a R90 Billion Investment Package from the European Union and burgeoning partnerships in untapped markets, South Africa is poised to fortify its economic resilience.

In navigating these complexities, the commitment from the South African government to not just react but adapt proves pivotal. As South Africa pursues its long-term vision for trade and investment—one grounded in sustainable practices and regional cooperation—the country remains dedicated to preserving its vital trading relationships and protecting its economic future.

IOL