South African merchants said African countries should turn towards markets including China after President Donald Trump’s tariff blitzkrieg, where African countries “nullify” transactions that offer US trade concessions to several African countries.
Parks Tau said Africa’s Growth and Opportunity Act is virtually no longer applicable in light of Trump’s tariff decisions. That is, African countries said they should shift their trade to rapidly growing markets, including countries from the south of the world.
“We need to ensure that we diversify and expand the people and countries we trade,” he said. “In the East, appetite is expressed (and) citrus fruits are present in products that can now be sent to the Chinese market.”
South Africa’s citrus exports could become one of the biggest casualties of the new 31% tariff Trump has imposed on South African goods.
South Africa exports $13.7 billion in agricultural products each year, with $500 million going to the United States. “Citrus is the produce most exposed to these new tariffs,” says Wandil Sirobo, chief economist in the South African Agricultural Business Office.
Trump struck several African countries on Wednesday with high tariffs. This includes 50% Lesotho, 47% Madagascar, 40% Mauritius and 37% Botswana.
Workers harvest grapefruit on citrus farms in South Africa © Waldo Swiegers/Bloomberg
South Africa, the continent’s most industrialized country, faces a 31% tariff rate under a scheme that will take effect next week.
All of these states trade with the US under Agoa. It was first enacted under Bill Clinton in 2000, with 32 African countries selling tariff-free products to the United States.
The agreement is expected to expire in September, and African countries, including South Africa, are desperately lobbying to extend it.
Tau said: “As long as the executive order says that essentially (agoa) laws do not apply, we will work on the basis that it invalidated Agoa’s interests.”
Almost half of South Africa’s profits from Agoa come from automakers, saving American car buyers $47 million in duties, according to Johannesburg-based XA Global Trade Advisors.
However, Tau said mutual tariffs on the US would be counterproductive. “It carries the risk of racing to the bottom,” he said. “There are all sorts of knee decisions in the announcement, and I think that’s dangerous.”
South Africa’s Minister Gwede Mantashe in February brought to light the idea that African countries should consider “withholding minerals from the United States.”
However, countries, including the Democratic Republic of the Congo, are seeking a deal with Washington based on the supply of minerals such as cobalt, coltan and copper needed for energy transitions.
Almost half of exports to the US to South Africa are made up of important minerals, including platinum, which is exempt from Trump’s import duties.
Heavy US tariffs in South Africa come when Pretoria, already in the midst of a budget crisis, is caught up in an explosive line with Washington.
Washington was seen last month as retaliation for Pretoria’s lawsuit against Israel, which denounced US ambassador to South Africa, Ebrahim Lasor, in response to its Pretoria lawsuit, which denies genocide in the International Court of Justice.
Washington also denounced South Africa for introducing land expropriation laws that white farmers say are threatening, and stating that Elon Musk’s Starlink Satellite Internet Service is promoting entry into the country.
This week, two US lawmakers introduced the bill to Congress and proposed a wholesale review of US relations with South Africa.
Republican Ronnie Jackson, one of the bill’s sponsors, claimed the country “brutally abandoned its ties with the United States in order to work with China, Russia, Iran and terrorist organizations.”
The bill “helps Trump move forward with his foreign agenda by giving him the tools he needs to impose sanctions on corrupt South African government officials,” he said.
South Africa’s Minister of International Relations Ronald Lamora said his country would not adjust its policies to please Washington. This is a “sovereignty issue where South Africa needs to remain strong and has principles.”
Donald Mackay, CEO of XA Global Trade Advisors, said Agoa didn’t cost much to the US, but it was an important source of soft political power. Last year, African countries accounted for less than 1% of all US imports, while US companies saved just $134 million on import duties under the AGOA.
