Efforts to resolve our trading relationship with the United States have stepped up a gear, with Trade, Industry and Competition Minister Parks Tau visiting the U.S. last week and preparations underway for President Cyril Ramaphosa to visit the country this week.
The DTIC said that Minister Tau met with US Trade Representative Jamieson Greer last week after three days of discussions between officials.
While this does not mean the end of 30% tariffs on imports from South Africa, it is a welcome sense of momentum toward a resolution.
The U.S. and South African teams agreed to a road map of future discussions toward a conclusion of the trade negotiations.
As I’ve written previously in this letter, the tariffs are having a serious impact on parts of our economy, especially the automotive industry, agricultural products, chemicals, and many more.
Already we have seen significant job losses as factories have suspended production lines, as US orders have collapsed.
Our officials have been working hard to try and achieve a breakthrough in an extremely complex environment, politically and legally, with multifaceted demands not only from the US but also from other trading partners.
The South African side has had to build a negotiating approach that recognises that South Africa is an important trading partner to the U.S., but our below-average growth rate means we are becoming less relevant over time.
Understandably, the U.S. will look at the likes of Angola and Nigeria through a different lens given the rapid GDP growth achieved there relative to our sub-1%.
U.S. demands include intruding on domestic policy issues like foreign ownership rules. There is no easy route to a solution.
When President Cyril Ramaphosa attends the UN General Assembly this week, there will be extensive activity on the sidelines as many trading partners attempt to use the opportunity to make a breakthrough.
SA is preparing an extensive engagement plan with business leaders, investors, as well as politicians.
However, it is far from clear that we will be successful. As many other countries have learnt, U.S. engagement and response can be unpredictable.
Domestic U.S. politics can have as significant an impact as any proposal the South Africans table.
So, while we may hope for the best outcome of these trade discussions, we do have to be prepared in case negotiations fail.
Business as well as political decision makers must plan for all scenarios.
In those in which we do not reduce any of the punitive U.S. trade barriers, or indeed even see heightened measures, we have little alternative but to focus efforts to build trade relations with the rest of the world.
Our African Continental Free Trade Agreement is important to accelerate the flow of goods to the rest of Africa.
Mutual recognition arrangements, such as those signed in July with India and the UK, ease customs and border procedures, removing trade frictions.
The BRICS arrangements also offer enhanced trade and investment opportunities as well as better advocacy for a fairer global trade system.
There is also much we can take forward out of the B20 process, particularly the trade and industrial transformation recommendations, including deeper regional trade through the AfCFTA and the adoption of green and digital technologies to re-energise manufacturing.
The DTIC is also preparing a mission with South African companies to Indonesia, Vietnam and Malaysia next month as part of its broader efforts to promote new trading corridors.
These efforts are well-supported by business and reflect a global structural shift as countries elsewhere simultaneously attempt to reduce their exposures to the US economy.
As a country, we must grasp every opportunity to build new markets.
Beyond trade negotiations, these efforts are part of addressing our wider economic challenges, where recent data offers cautious reason for optimism.
There was a glimmer of optimism in the growth figures released earlier this month for the second quarter of the year, which showed growth of 0.8% for the quarter.
That is far from what we need, but it is a step in the right direction, coming after 0.1% in the first quarter.
It was also slightly ahead of most economists’ forecasts.
As a result, several economists now see growth for the full year to likely come in just over 1%.
Several factors are helping, including the boost in precious metals prices and lower interest rates (which were held steady last week, but seem likely to move down further at some point as inflation stays well contained).
The fruits of our efforts to resolve the electricity crisis, as well as the country’s logistics crisis will start to be felt as businesses are able to resume investing, confident that they can now build production with reliable energy and be able to trust that goods can reach markets around the world.
However, the investment component of the GDP figures was a big disappointment, coming in at the lowest level we’ve seen since 2003, equivalent to 13.5% of GDP.
Public corporations, particularly Transnet and Eskom, were especially weak.
Considering that the Budget set an infrastructure investment target of R1 trillion over the next three years, it is clear that public spending plans are not getting out of the starting blocks.
That needs to change, and our efforts to resolve the electricity and logistics crises are critical to making that happen.
The gap between ambition and execution has never been starker.
The months ahead will test our collective resolve and adaptability as a nation.
Whether we achieve a breakthrough in U.S. trade negotiations or must navigate continued barriers, the imperative remains the same: we must accelerate our economic transformation through diversified partnerships, improved infrastructure and increased investment confidence.
The modest growth we’ve achieved this quarter, while encouraging, underscores that we cannot afford to wait for external solutions.
Business and government must work together with renewed urgency to unlock the investment and productivity gains that will drive sustainable growth and job creation.
In an increasingly fragmented global economy, South Africa’s success will depend not on any single trading relationship, but on our ability to build resilience through multiple pathways to prosperity.
*This column was first published in the Business Leadership South Africa (BLSA) weekly newsletter. The author, Busisiwe ‘Busi’ Mavuso, is the CEO of BLSA.
*The views Busi Mavuso expresses in this column are not necessarily those of The Bulrushes
