SA Responds to US Tariffs with Export Support, Engages China for Trade Growth

Cabinet has outlined a comprehensive, multi-pronged response designed to mitigate the negative impact of US tariffs while enhancing the long-term resilience of South Africa’s export-driven economy.

The South African government has reaffirmed its commitment to finding sustainable solutions through ongoing engagement with the United States at the highest levels, following the recent imposition of a 30% tariff on South African imports by US President Donald Trump, effective 7 August 2025. The tariff hike—expected to hit vital sectors such as automotive and agriculture—has prompted a swift policy response aimed at defending jobs, supporting affected industries, and diversifying export markets.

Minister in The Presidency, Khumbudzo Ntshavheni, delivered a detailed media briefing in Pretoria on Thursday after the weekly Cabinet meeting in Cape Town, confirming that Cabinet had received an update on the ongoing trade Framework Deal with the US. She noted that the agreement contains provisions for an early review of the tariffs as soon as a deal is concluded.

“Government’s efforts remain focused on growing the economy to save and create new jobs, which include intensifying diversification efforts and strengthening global supply chain integration as the country works to expand its export markets to Asia, Europe, the Middle East, and across Africa to enhance our economic resilience,” said Ntshavheni.

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Rapid Policy Interventions to Protect Jobs and Industry

Cabinet has outlined a comprehensive, multi-pronged response designed to mitigate the negative impact of US tariffs while enhancing the long-term resilience of South Africa’s export-driven economy. Key interventions include:

• Export Support Desk: A newly established platform serving as a direct contact point for companies affected by US tariffs, offering guidance and assistance.

• Tariff Absorption and Resilience Measures: Assistance to help companies absorb the increased costs and develop strategies for sustainable growth, protecting jobs and production capacity.

• Localisation Support Fund (LSF): Financial support for impacted businesses, reinforcing the broader national push towards local value addition and domestic supply chains.

• Export and Competitiveness Support Programme (ECSP): Includes a working capital facility and plant and equipment funding, targeting short- and medium-term needs across all industries.

• Employment Protection Measures: Collaboration with the Department of Employment and Labour to deploy flexible, existing instruments to mitigate potential job losses.

Ntshavheni also revealed that a Block Exemption for Exporters has been introduced, following consultations with the Competition Commission. The exemption will enable collaboration and coordination among competitors to support collective export initiatives. A draft will be published imminently to expedite the process.

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High-Level Diplomatic Engagement

On 6 August 2025, President Cyril Ramaphosa held a telephone conversation with President Trump to discuss the tariff issue and overall bilateral trade relations. Both leaders agreed to continue constructive engagement, recognising that detailed negotiations must take place at the technical level.

“The President’s call was in support of the ongoing negotiations. Agreement can’t be reached in a single call—technical teams must do the work, and negotiations remain open,” said Minister Ntshavheni.

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Expanding Markets: The South Africa-China Trade and Investment Package

As part of its drive to diversify and fortify South Africa’s trade portfolio, the Department of Trade, Industry and Competition (dtic), together with industry associations and export councils, has formulated a South Africa-China Trade and Investment Package (2025–2029). The package forms the basis for enhanced engagement with China and encompasses:

• Trade Initiatives: Prioritising exchange of the top 100 traded products, establishing a permanent South African expo in China, and joint efforts to overcome regulatory barriers.

• Investment and Industrial Development: Focused on investments in steel, tyres, automotive, batteries, pharmaceuticals, medical devices, rail manufacturing, and the digital economy.

• Skills Development: Targeted training and skills transfer aligned to priority sectors, including aftercare and maintenance support.

Deputy President Mashatile led a South African delegation to China from 14–18 July 2025, where the package was formally shared with Chinese counterparts. The Deputy President also launched the South African National Pavilion at the China International Supply Chain Expo (CISCE), showcasing South Africa as a gateway to Sub-Saharan Africa for trade, investment, and industrial partnerships.

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Diversifying, Building Resilience, and Looking Ahead

With the US tariffs threatening key export sectors, the Cabinet has emphasised the importance of not only negotiating relief with Washington, but also strengthening trade ties with alternative partners, including China, the EU, and the rest of Africa. The government’s efforts are now directed at supporting local industries, safeguarding employment, and ensuring South Africa remains integrated with global supply chains—despite mounting protectionist pressures.

The Ministry underscored its readiness to adjust policies, collaborate with industry, and leverage international partnerships to shield the economy from shocks and promote sustainable, inclusive growth in the years ahead.