SA needs its ‘export or die’ moment amid looming US tariffs

Trade is mutually beneficial albeit worryingly protectionist

- MUSHTAK PARKER

THE dichotomy of South Africa's trade and tariff playbook could not have been starker in the two sets of data revealed over the last few days - the one set showing that South Africa had a healthy trade surplus with the US of R37bn in 2024, and an equally healthy trade deficit of $9.71bn in 2023 with China, its other major trading partner.

The guttural response against the US imposition of 30% tariffs on South Africa with the threat of another 10% because of its membership of BRICS, while understandable because of the impending likely loss of Pretoria’s privileges under the African Growth and Opportunity Act (Agoa) Programme in September when its renewal comes before President Trump, is perhaps emotively misplaced given the inherent complexities and contradictions of the global and South African trade and investment system.

We are told that one way for South Africa and other low-and-medium-income-countries (LMICs) to mitigate the tariff impact trade imbalances is not to put our eggs in one basket (mainly the US and the EU) and to diversify our trade and investment pathways to new markets in Asia, Africa, Latin America and the Middle East.

While diversification of markets, trading partners, investment sources are all highly commendable, the reality is far more complex and depends on a cornucopia of metrics, some of which are out of the control of countries.

If deficits or surpluses are the overriding criteria in defining trade ties between nations as the Trump doctrine seems to suggest, then we are going down a slippery slope of an economic unorthodoxy bereft of any rational economic or market theory.

Blaming other countries for the chronic US current account deficit is as economically illiterate as it is puerile because the US spends more than it produces.