Trade, Industry and Competition Minister Parks Tau will present Cabinet with a proposed support package for South African companies and workers that will be negatively affected by the 30% reciprocal tariffs to be imposed on South African exports to the US at 12:01 am eastern daylight time on August 8.

The package is being developed in parallel to ongoing attempts to negotiate a trade deal with the US, which accounts for 7.5% of all South African exports, making America South Africa’s third-largest global export market after the EU and China.

South African exports to America, which stood at $14.9-billion in 2024, could decline by up to $2.3-billion yearly, independent research has indicated.

Previous attempts at finalising a deal have failed, despite South Africa having proposed a framework deal in May, which included various concessions on agricultural exports to South Africa and even an offer to buy American liquefied natural gas.

Speaking during a joint briefing held in Ekurhuleni with International Relations and Cooperation Minister Ronald Lamola, Tau said his department was currently modelling the impact on industries and companies that were exposed to the 30% tariff and working on possible support measures with other government departments.

Initial modelling indicated that up to 30 000 workers could be negatively affected by the reciprocal tariffs. This, after also considering prevailing tariffs on automotives, steel and aluminium and the exemptions confirmed by the US.

A total of 35% of South African exports to the US were exempted, including “copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, stainless steel scrap and energy and energy products”, Lamola said.

Besides the Export Support Desk that had already been established to offer affected companies advice on the tariffs and to support their export diversification, Lamola provided an overview of some of the other components that were being finalised for incorporation into the so-called ‘Economic Response Package’, including:

• Various measures that could assist companies to absorb the tariffs, while protecting jobs and productive capacity;
• Drawing on the Localisation Support Fund to issue an open call from firms operating in affected value chains, with the aim of providing targeted competitiveness and efficiency support;
• The creation of an Export and Competitiveness Support Programme, which will include a working capital facility and plant and equipment facility to address short- to medium-term challenges across all industries;
• The initiation, with the Department of Employment and Labour, of measures to mitigate potential job losses by using existing instruments within its entities; and
• The publication in the coming days of a block exemption by the Competition Commission that will allow collaboration and coordination by competitors to achieve export economies of scale and efficiencies.

“We are going to Cabinet on Wednesday with a set of more detailed proposals that we are finalising with sister departments that will elaborate on the structure of the support package,” Tau said, indicating that the final package should be communicated before the end of the week.

Both Tau and Lamola stressed that they had not given up on securing a trade deal with the US, stating that all diplomatic channels would be used to negotiate a “mutually beneficial” agreement.

However, Tau highlighted the “unprecedented” nature of the negotiation process, whereby South Africa was being asked to make a final offer without any sense of what tariff it could receive or whether the US would respond.

“So, we can only make an offer and sit and wait and hope.”

He noted, for instance, that having been requested by the US to hold off from pursuing a bilateral agreement while America finalised a template for sub-Saharan Africa and then having signed a confidentiality agreement, the agreement was then never counter-signed by the US.

Nevertheless, South Africa had no intention of abandoning its diplomatic efforts which would continue “until a point where we are able to reach a conclusion”.

“That, I think, is an important statement to make, because I think that the idea that we can get to a point where we decide that we are not going to talk to any government and we are not going to engage in any trade negotiations, would be irresponsible for us as a country.”

On whether the US had made specific demands in relation to South Africa’s black economic empowerment and affirmative action policies, or its prioritisation of farm murders, Lamola said these issues had not featured in the framework agreement.

“We have heard the speculations from those who have visited Washington and who have told us that these are the issues, but those issues are not in the feedback [from the US] and what we have on the table with regards to the framework we have submitted.”