South Africa iced out over black economic empowerment
South Africa is awaiting a response to its trade proposals from US President Donald Trump’s administration and isn’t assured of reaching a deal by 1 August that would avoid 30% tariffs being imposed on its imports.
“We remain committed to the cause as we await substantive feedback from our US counterparts on the final status on our framework deal,” South African Trade Minister Parks Tau said in a statement on Tuesday.
“South Africa is not in a unique position as the US attempts to finalize negotiations with some 185 countries around the world by 1 August.”
After backpedaling on plans to impose sweeping duties on US imports earlier this year, Trump renewed his threat to institute them this week unless bilateral trade deal are agreed.
The US is South Africa’s largest trading partner after China.
A 30% tariff could put more than 100,000 jobs in South Africa’s auto and agricultural sector at risk, central bank Governor Lesetja Kganyago warned earlier this month.
That would be a big knock to a country that already has one of the world’s highest unemployment rates and tepid economic growth.
Sticking points to achieving a deal include the nation’s Black empowerment policies that were introduced after 1994 to address racial disparities stemming from colonial and apartheid rule, Zane Dangor, the director-general of South Africa’s foreign affairs department, told a panel discussion earlier on Tuesday.
“What is bedeviling the issue is some of the demands that are being made,” he said. “They were quite clear that there are certain things they expect from South Africa and Black economic empowerment was high on the agenda.”
The country has been in talks with the US since May, when President Cyril Ramaphosa endured a combative meeting with Trump during a visit to the White House.
The US leader used the opportunity to repeat false claims that White Afrikaner farmers were being subjected to a genocide in South Africa and their land was being confiscated.
The authorities haven’t taken any real estate since apartheid ended in 1994.
Last week, Tau said South Africa signed a condition precedent document with a US trade representative and was awaiting a template from Washington to make further input.
As part of its proposed deal, South Africa said it was prepared to import as much as 100 petajoules of liquefied natural gas for 10 years from the US, which would generate $12 billion for American firms, and invest $3.3 billion in US industries such as mining and metals recycling.
In return, it asked for specific sectors such as ship building and counter-seasonal agriculture products to be excluded from reciprocal tariffs.
The US has already reached strategic trade deals with the European Union, Vietnam and Japan.
Loading ...