Minister Tau calls for cool heads as SA mulls next move in response to Trump's tariffs
Trade and Industry Minister Parks Tau said imposing reciprocal tariffs, without understanding how the US arrived at 31% would be 'counterproductive' and 'ill-conceived'.
Parks Tau. Picture: Instagram
JOHANNESBURG - Trade and Industry Minister Parks Tau has called for cool heads as the South African government mulls its next move in response to United States President Donald Trump’s latest tariffs.
This week, Trump imposed universal tariffs on its global partners in a move he said would balance the trade scales.
READ: Trump's global tariff takes effect in dramatic US trade shift
A 10% baseline tariff will now apply to all imports into the US, while some countries have been taxed higher.
Tau and International Relations Minister Ronald Lamola held a joint press conference responding to global developments in Midrand on Friday.
Labelled one of the worst offenders on the US trade list, South African exports to the US will carry a 31 duty.
There are some exemptions, though, like copper, pharmaceuticals, semiconductors and some critical minerals.
The US said its trade with South Africa was far too skewed in South Africa’s favour.
But Tau has protested the calculations used to derive the latest tariffs.
Unlike other countries who have slapped the US with equivalent reciprocal tariffs, Tau said it was too soon to act.
“In our context, taking an approach that would say we’re imposing reciprocal tariffs, without understanding how they arrived at 31% would be counterproductive and it would be ill-conceived.”
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The matter is set to be taken to cabinet for further discussions.
AGOA
Meanwhile, South Africa said it had no grounds to legally challenge sub-Saharan Africa losing out on the Africa Growth and Opportunity Act (AGOA), which is set to fall away following the latest United States (US) tariff.
This after South African officials confirmed that the US’s reciprocal tariffs imposed by Trump effectively nullify preferential trade deals, including AGOA.
AGOA, which is US legislation established in 2000, gives eligible African countries exemption from taxes on their exports to the US.
But Trump’s announcement about global tariffs on trade partners shifts global trade ties.
While the writing is on the wall, Tau said South African officials plan to meet with US trade officials on the matter.
“And we will go back to the US and say we want to talk around a bilateral engagement on our trade issues with the US. Because there are specific trade issues that happen between the US and South Africa, even outside AGOA.”
If the fresh tariffs lead to AGOA being terminated, Tau said he doesn’t believe the decision can be appealed.
“It’s US law, it’s on the basis of the United States’ ability to utilise their own legislation and I guess it is US courts that will determine if these executive orders are legal.”