By Enyichukwu Enemanna
South Africa’s President, Cyril Ramaphosa on Monday rolled out intervention measures to assist local companies that will be hit by a 30% U.S. tariff which takes effect this week.
The measures include exemptions from some competition rules and financial support facilities.
Authorities have also dismissed allegation that failure to negotiate a lower tariff was because of the country’s local affirmative action policies, which U.S. President Donald Trump has criticised.
Pretoria had months ago attempted to negotiate a deal with Washington, offering to buy U.S. liquefied natural gas and invest $3.3 billion in U.S. industries in a “framework deal” proposed to Trump’s team.
The effort however proved unsuccessful, even after a last-minute efforts by South Africa to improve its offer.
The U.S. tariff could cause tens of thousands of job losses, South African officials said, especially in the agriculture and car manufacturing industries.
Trump has not hidden his desire to push for a reshape of global trade in favour of the United States.
Addressing a joint press conference on Monday, South Africa’s trade and foreign ministers said a “block exemption” from some aspects of the Competition Act was being developed that would allow competitors to collaborate and coordinate.
The ministers said the exemption details would be published by the end of this week.
Ramaphosa is also working on a support programme, which will include a working capital facility and plant and equipment facility, and ways to cushion the impact of job losses through the Unemployment Insurance Fund (UIF).
Duo of the ministers said South Africa posed no “trade threat to the U.S. economy nor its national security,” emphasising that its exports supported the U.S. industrial base and often do not compete with U.S. products.
Trade officials said an export support desk would try to help companies enter new markets by linking them up with embassies and potential buyers. A more detailed set of support measures will be discussed at a cabinet meeting on Wednesday.
