SA must broker new US trade deal amid tariff threat, BRICS Business Council leader says

SOUTH Africa must urgently pursue a new trade deal with the US to safeguard its economic interests amid rising tariffs and renewed uncertainties, a senior business leader said, as the Trump administration's "Liberation Day" policy threatens to unravel decades of duty-free access under the African Growth and Opportunity Act (Agoa).

- PHILIPPA LARKIN

Dr Stavros Nicolaou, a member of the South Africa BRICS Business Council who is responsible for the trade portfolio, said in an interview on Friday that Business Report's Executive Editor, Philippa Larkin that a new agreement is vital following the US imposition of a 30% tariff on South African goods, effective from Wednesday (April 9), alongside a global 10% import levy announced on April 2.

The US is by far the market for South Africa's Agoa beneficiaries, having accounted for 7.7%, or $115.69 billion, of all South Africa's exports to the world in 2024. A large portion of such exports is entering the US market duty-free under Agoa.

The measures, part of President Donald Trump's pledge to address trade imbalances, imperil Agoa, which has enabled SA to ship goods in the list of Agoa exports - including citrus, platinum, and citrus - to the US in 2024 alone. With Agoa's potential renewal due in September, Nicolaou warned of an economic cliff edge.

"If Agoa is hanging by a thread, the logical thing to do here is to conclude a completely new trade deal," Nicolaou said. "It could be just a trade deal; it could be a broader, comprehensive trade agreement." He underscored the interdependence of the $29.4bn two-way trade relationship, explaining: "We do need to try and work our way towards a new trade deal with the United States. The reality is that as a trade level, both countries treat each other - we see the US as a market for our products, and they in return need all resources for critical minerals and certain related industries like bodywork products - radioisotopes, etc. So inevitably that the US imports from South Africa amongst the Agoa goods," he said.

The US is South Africa's second-largest trading partner after China. In South Africa there are 601 American companies that employ tens of thousands locally.