“We work on the basis that the tariffs have nullified Agoa [African Growth and Opportunity Act] benefits in particular categories,” says Minister of Trade, Industry and Competition Parks Tau, at a joint media briefing with Minister of International Relations and Cooperation Ronald Lamola on Friday.
“It does also exclude [from Agoa] areas such as auto, which is calculated on the basis of the across-the-board 25% tariff increases to the US,” says Tau.
Read: South Africa seeks US talks as carmakers face 25% tariff hit
This comes after US President Donald Trump announced plans to impose a minimum 10% tariff on all US imports, with even higher duties targeting key trading partners.
Trump imposed a 30% levy on goods imported from South Africa, but Tau says this was rectified to be a 31% levy.
Agoa is legislation approved by the US Congress in May 2000 to allow certain African countries preferential access to the US markets. South Africa has been one of the countries that have benefited from this legislation for over two decades.
Tau explained that the US trade stance does not support agreements that appear to be one-sided. Based on this principle, the department considers Agoa effectively nullified.
According to Tau, the US has confirmed that the Agoa Forum, an annual forum on ways to boost economic cooperation and trade between the United States and Africa, is still happening in July.
Read: SA delegation meets with US officials to mend ties
“As African trade ministers trading under Agoa, we have to engage on the basis of a US that has adapted its trade policies, and we have to adjust our own engagement to acknowledge that. My sense is that when we go to the US as trade ministers, we are going to engage on the basis of a US approach that does not want arrangements that only benefit one side,” says Tau.
Engagement with the US
Tau touched on the topic that has been circulating: having reciprocal tariffs on goods imported from the US.
“That would be a race to the bottom. It would be ill-considered to simply just make a decision to impose a reciprocal tax. Our approach has always been to engage with the US and send a delegation. We are not going to simply make public pronouncements,” says the minister.
Read: Facts don’t support Trump’s reasoning for a 30% tariff on SA
A delegation is preparing to travel to the US, but President Cyril Ramaphosa will announce the exact date, Tau commented.
He says the conversation will centre around tariffs and bilateral trade agreements between the US and SA.
“There are specific trade issues that happen between the US and SA even outside of Agoa. In fact, the bulk of our trade with the US is outside of Agoa. 25% of our trade with the US is under Agoa a, and 75% has been under most-favoured-nation governed by the World Trade Organisation,” Tau noted.
Read: US lawmakers revive call for review of South African relations
The World Trade Organisation explains the most-favoured-nation (MFN) principle as a cornerstone of a multilateral trading system conceived after World War II. It seeks to replace the frictions and distortions of power-based (bilateral) policies with the guarantees of a rules-based framework where trading rights do not depend on the individual participants’ economic or political clout.
“We also need to talk to the US around bilateral trade for our respective investments. We have also significantly invested in the US as a country and we have significant investments through Sasol, Sappi and others. We have companies that have listed on the US stock exchange,” says Tau.
Read: Parks Tau seeks talks with US on tariffs
In his fact sheet, Trump justified his tariff on SA by saying that the country imposed animal health restrictions on US pork products that are not scientifically justified, permitting a very limited list of US pork exports to enter South Africa.
“South Africa also heavily restricts US poultry exports through high tariffs, anti-dumping duties, and unjustified animal health restrictions. These barriers have contributed to a 78% decline in US poultry exports to South Africa, from $89 million in 2019 to $19 million [in] 2024,” says Trump.
Defending SA’s position, Tau says there is a scientific reason for the tariffs on pork, and the US has disputed the reason. “The US thinks it’s an unfair imposition, but our Department of Agriculture has demonstrated why that is an important consideration for our own pork industry. We need to meet and find each other on those issues.”
COMMENTS 9
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Now we can stop using AGOA as a threat to abandon our progressive policies.
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“The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement. They call themselves liberals, but they are intent upon abolishing liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want to make the government omnipotent. They promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office. Every man but one a subordinate clerk in a bureau.” – Ludwig von Mises
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It would be great if some prominent (in their own eyes) South Africans understood the business world and the negative effect of rhetoric uttered by Ambassadors, Luthuli House, the Red Berets, and other idiots.
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But, Mr Tau, we ARE at the bottom. Energy, transportation, health, education, social services, and unemployment have never been worse.
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Time to eat some humble pie .. time to negotiate on reasonable reciprocal tariffs . This is not difficult! Reset now .
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Absolutely, perhaps start by removing VAT on imported US goods.
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South Africa will use the Trump-mania caused by the introduction of 100’s of tarriffs yesterday to dodge taking responsibility for its foolish actions that wouldve seen us dropped as an AGOA beneficiary anyway. “It’s that madman Trump’s fault, not ours!” our govt will proclaim, using the current tariff noise to evade responsibility.
But our foreign policy choices and legislative actions over the past few years are in contravention of some of the rules/terms we agreed to under AGOA. So we (taxpayers) cannot expect to continue benefiting from an agreement we (government) have repeatedly breached. Likely job losses amongst taxpayers, but no consequences for (un)civil servants.
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Finally AGOA gone, we can stop hearing about it.
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SOUTH AFRICAN POLITICIANS—-STAND ON YOUR OWN 2 FEET !!
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