Tariff tit-for-tat with US 'a race to the bottom', says minister Parks Tau

South Africa will not respond to US tariffs with reciprocal tariffs on US goods as this would prove to be a “counterproductive race to the bottom” in a world where trade protectionism is increasingly prevalent,  according to trade, industry and competition minister Parks Tau.

The minister briefed reporters on Friday in Pretoria with minister of international relations and co-operation Ronald Lamola.

The briefing comes after US President Donald Trump announced 30% tariffs on imports from South Africa as a reciprocal tariff to what the White House claims is a 60% tariff imposed on US goods imported into the South African market.

Since returning to the White House, Trump has announced new tariffs including a sweeping 25% tariff on foreign vehicles and parts.

Former Canadian prime minister Justin Trudeau announced tariffs on US goods after Trump announced tariffs on Canadian imports.

Asked if South Africa would respond to the US tariffs in kind, Parks said imposing reciprocal tariffs without understanding how the US arrived at their tariffs would be counterproductive, trigger “a race to the bottom” and risky trade practices that will harm relevant markets.

“It would be ill-considered to just make a decision to impose reciprocal tariffs. In any case, we are going to engage the US and our commitment is to engage meaningfully until we find the solutions to these problems.”

Tau said while he did not believe the tariffs were directly linked to the spat between Pretoria and Washington earlier this year over land expropriation, President Cyril Ramaphosa still planned to send a delegation to the US to resolve tensions with the Trump administration.

A previous scheduled trip was put on hold because the government learnt tariffs would be announced on April 2 and wanted to study the tariffs and formulate a response before travelling to the US.

Lamola told reporters  South Africa's response to the US tariffs would include negotiating for favourable bilateral trade deals with markets including the US, diversified trade networks, enhanced regional trade, value-added production and forging an alliance of pro-trade nations.

“The new tariff regime arising from the decision by the US which had been directed not only at South Africa but the entire world necessitates strategic responses to maintain and grow our industrial base as a crucial avenue to pursue inclusive growth.

“South Africa will continue to navigate the challenges and opportunities these measures present with resilience and innovation. Guided by its national interests and aligned with its broader trade and industrial policy, South Africa is committed to ensuring economic growth, industrial development and the wellbeing of its citizens.”

Tau said while the new tariffs were expected to supersede the duty-free provisions of the US government’s African Growth and Opportunity Act (Agoa), the Agoa Forum in Washington is still scheduled to take place in July and South Africa planned to attend and lobby for Agoa’s extension beyond its expiration in September.

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