Beijing could absorb US tariff blow to South Africa

South African exports to the United States, which is set to be hard-hit by the 30% blanket tariff implemented by the global hegemon in early August, could be absorbed by the Chinese market.

This is according to Professor Zhang Weiwei, a political analyst and international relations lecturer at Fudan University, who spoke on the SMWX podcast about Beijing’s response to the tariffs on African countries.

China is South Africa’s largest bilateral trading partner. In 2024, R219.77 billion worth of goods and services were exported to the Asian nation, while R398.15 billion was imported. This leaves South Africa with a R108 billion trade deficit.

“So, based on my analysis of the Chinese market, China could easily consume Africa’s exports to the United States, if we were to look at the extreme case.”

He explains that the US is still the world’s largest consumer market in nominal terms. However, the Chinese market is considerably bigger when purchasing power parity is considered. 

China implemented zero tariffs for all African countries, except Eswatini, because of their relations with Taiwan, bringing about free trade.

According to the South African Revenue Service, Ores are by far the largest export category, with just over R143 billion worth of these goods exported to China in 2024.

Gold, platinum, and diamonds are South Africa’s biggest ore exports. This was followed by metals, such as iron and steel (R25.42 billion) and copper (R15.42 billion).

Other goods exported that aren’t metals and minerals include fruit, vegetables, and nuts, such as citrus, corn, apples and pears, amounting to nearly R7.5 billion.

South Africa recently announced that it will export apricots, peaches, nectarines, prunes, and plums to the East Asian country to diversify its trade partners, given the implementation of the 30% tariff.

Agricultural economist Thabile Nkunjana told BusinessDay TV that while South Africa has been pushing for this for some time as part of its diversification strategy, it does not intend to replace the US market.

“The US will remain a market that South Africa will not be able to overlook for several reasons. However, it is important to diversify trade partners to cushion the effect of the 30% tariff,” Nkunjana said.

Importance of the US as a trade partner

SARS lists the US as the second biggest buyer of South African exports, with goods and services sold to the country valued at R156 billion in 2024.

Like China, precious metals are the most valuable goods exported to the US. Platinum, gold, and diamonds make up the bulk of this.

The second largest export category is metals such as aluminium, iron, and steel, comprising over R1 billion of total exports.

Transportation are also a significant export category to the US, including vehicles, ships, and aircraft.

South Africa’s automotive industry is the most significant player in its manufacturing industry, directly employing over 100,000 people and 500,000 in the greater value chain.

Therefore, the potential impact of the 30% tariff on South Africa’s automotive industry has been considered a significant threat to the country’s economy.

This first became apparent when the US threatened to remove South Africa from the African Growth and Opportunity Act (AGOA), which provides African countries with duty-free access to the American market.

According to the president of the National Association of Automobile Manufacturers of South Africa (Naamsa), Billy Tom, automobile exports to the US increased by 498% from Agoa’s inception in 2001 to 2023.

A rapid rise in exports has also meant that the industry has become dependent on selling cars abroad, with only one in every three vehicles produced in South Africa sold locally.

Given the influx of Chinese car brands like Great Wall Motors and Chery, those sold locally face increased competition.

This being said, South African manufacturers trying to compete with these brands in their domestic market would be challenging, making it unlikely that there would be demand for these vehicles in China. 

This further emphasises the importance of exporting vehicles to the US.

Diversifying trade

President Cyril Ramaphosa recently announced that the South African government is working to broaden the country’s trade network to new markets to reduce dependence on old markets.

In a recent newsletter, the President said South Africa is seeking a new trade regime that does not render developing countries vulnerable to protectionist policies and unilateral measures.

Ramaphosa made it clear that U.S. pressure would not alter South Africa’s foreign policy.

“Our outlook is not determined by pressure exerted by outside forces, but by principle,” he said, adding that the country’s diplomatic strategy is to build partnerships that “favour, advance, and safeguard South Africa’s national interests.”

Quoting the well-known maxim, “‘We face neither East nor West, we face forward,’” Ramaphosa emphasised that South Africa would continue to work with both the Global North and Global South.