![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2025\/01\/Parks-Tau-1.jpg\")
<\/a>The political spats come amid terse trade negotiations between South Africa and the US.<\/p>\n\n\n\n
In April, the US announced a 30% “reciprocal tariff” on South African exports, which came into effect in early August.<\/p>\n\n\n\n
The tariff was one of many, with certain categories seeing compounding tariffs as the United States unilaterally altered the terms of global trade.<\/p>\n\n\n\n
In a presentation to the Portfolio Committee on Trade and Industry this week, the Department of Trade, Industry and Competition (DTIC) outlined both the positive and negative aspects of these trade tensions.<\/p>\n\n\n\n
On the negative side, while negotiations with the US are ongoing, there appears to have been no progress in reducing the reciprocal tariffs.<\/p>\n\n\n\n
The DTIC said its objectives remain to “negotiate an agreement that creates a level of predictability on trade, reduces the reciprocal tariff and enables trade to continue to flow, without compromising our ability to make policies that advance national interests”.<\/p>\n\n\n\n
The US tariffs have hit local exports, with the 50% reciprocal tariff adding to the so-called Section 232 tariffs on specific categories, which have impacted between 14% and 22% of exports, depending on category.<\/p>\n\n\n\n
On the positive side, the DTIC noted that the impact of the US tariffs hasn’t been as bad as initially expected, adding that around 35% of key exports\u2014mainly mining and minerals\u2014are exempt.<\/p>\n\n\n\n
The department also added that, while disrupted, trade under World Trade Organisation rules are still holding, despite declining from 80% to 72% since the start of 2025.<\/p>\n\n\n\n
The DTIC said that South Africa enjoys preferential market access through a customs union, free trade agreements, a preferential trade agreement, and several non-reciprocal preference programmes.<\/p>\n\n\n\n
The country’s reciprocal trade agreements currently cover 90 countries, with a combined GDP equal to 28% of world GDP and 29% of world population.<\/p>\n\n\n\n
In lieu of any progress with the United States, progress is being made with the African Continental Free Trade Area (AfCFTA), trade is ramping up under the Southern African Customs Union (SACU), and South Africa is forging new partnerships with the European Union.<\/p>\n\n\n\n
South Africa’s plan is to launch a new “Butterfly Strategy” to diversify its export markets, where the country will ‘spread its wings’ to establish category-specific exports to 27 priority markets.<\/p>\n\n\n\n
The DTIC said it will focus on expanding and improving the effectiveness of current export measures while implementing new export initiatives to deliver on the strategic target of growing the value of South African exports from R2 trillion to R3 trillion by 2030.<\/p>\n\n\n\n
“This matrix will serve as a starting point to guide market engagements, and through implementation of export initiatives, these opportunities will be further tested in the market and refined,” it said.<\/p>\n\n\n\n