Two weeks to disaster for South Africa

A critical deadline for South Africa is looming in two weeks’ time when the United States’ big tariff pause will come to an end, and the country will be slapped with a 30% punitive trade costs.

This will deliver a crippling blow to the country at an incredibly sensitive time, unless the national government can find a way to secure an extension.

US President Donald Trump announced a universal tariff on imports in April 2025, with a flat 10% tariff taking effect from 5 April.

An additional tariff, referred to as ‘reciprocal tariffs’, were to come into effect on 9 April, however these were put on pause for a period of 90 days.

That 90-day pause will come to an end on 9 July 2025, just over two weeks away, and South Africa is running out of time to make a deal with it key trade partner.

According to Business Leadership South Africa chief executive, Busi Mavuso, this week will play host to a crucial meeting between Trade, Industry and Competition Minister Parks Tau and US officials that could determine South Africa’s entire economic trajectory.

“Progress has been disappointing since President Trump and President Ramaphosa’s Washington discussions, where South Africa tabled proposals including mineral access and potential US liquified natural gas acquisitions,” she said.

“The US has not given formal feedback and the clock is ticking. The minister and his team must break the log jam.”

Mavuso said that the end of the deadline and the critical talks are coming amid major geopolitical shifts that are adding pressure.

While the US focuses on wars in Ukraine and the Middle East, and tensions within its own borders, China has stepped up its influence in Africa.

China’s recent announcement of duty-free access for all African nations with diplomatic ties will not have gone unnoticed in Washington, Mavuso said.

“We may be witnessing a fundamental shift in Africa’s global orientation—one that could permanently damage American interests on the continent.”

This matters “profoundly” for two reasons: First, Africa remains a crucial source of critical minerals essential to the American economy.

Second, the continent’s young, growing population positions Africa as a key long-term consumer market and manufacturing hub.

“America risks ceding this strategic advantage to China,” she said.

South Africa’s industries at risk

Mavuso said that South Africa needs to present a materially different proposition to the United States that serves American and local interests together.

She said the countries can’t rest on “incremental gestures”.

Failure to either get an extension on the tariff freeze or to solidify a trade deal with the United States will bring down significant pressure on South Africa’s key industries.

The consequences of failure will fall hardest on manufacturing and agriculture, Mavuso said—sectors that drive employment.

Under the US ‘reciprocal’ tariffs, raw material exports remain exempt, but value-added activities that create jobs face significant disruption under 30% tariffs.

“We cannot afford to lose these employment-intensive industries,” Mavuso said.

“This week’s meetings will be defining. We need a deal that recognises economic realities while serving mutual interests. The stakes are high.”

These disruptions will be exacerbated by the potential loss of the African Growth and Opportunity Act (AGOA), which is part of the negotiations.

The trade framework presented to the United States in May contained provisions related to AGOA, which is currently under consideration for reauthorisation by the US Congress.

While many economists, analysts and industry experts expect South Africa’s time in AGOA to come to an end in September (if not sooner), the DTIC has emphasised to the US the Act’s importance.

A more detailed South African proposition on AGOA is expected to be presented at the upcoming US-Africa Forum.

“We have agreed to develop a collective approach (as Africa) with regards to AGOA…but as South Africa, we have it in our document that the reauthorisation of AGOA is important,” Tau said.