The United States has appointed itself judge, jury, and enforcer. It decides what counts as a foreign wrong, decides the penalty, and collects it; and this is a wake-up call for South Africa to diversify and deepen economic ties with other partners to reduce vulnerability, according to experts.
The economists and international relations experts were speaking after the United States implemented new Section 301 tariffs under its Trade Act of 1974 against various nations for inadequate enforcement of forced-labour import bans.
South Africa faces a 12.5% duty on affected exports to the United States, as it has been placed in the upper tariff tier, alongside major economies such as China, Japan, and South Korea.
Professor Adrian Saville, an economics, finance and strategy expert at the University of Pretoria, said SA holds very few cards because the United States buys roughly 7% of what South Africa sells abroad.
“When the customer is that big, and you are that small, you do not get to set the price. It’s a bit like going into a hypermarket as a small customer and trying to haggle for discounts. That said, this is less a negotiation than an entrance exam, and the criteria for passing have been published,” Saville said.
He warned that minerals are not a weapon here, since platinum-group metals and critical minerals are already exempt, leaving nothing to withhold.
Saville stated that South Africa is required to write a law banning imports made with forced labour and then enforce it, adding that Pretoria has already said it will gazette exactly such a rule.
He said tighter borders are unlikely to change what is moved dramatically; however, queues, forms and resentment can be expected among neighbours who already depend on South Africa for a large share of their state revenue.
“In terms of Africa absorbing the (SA) goods, this is unlikely. All trade between African countries came to about $210 billion last year. Even if we can get the trading arrangements fixed, nobody in Lusaka or Lagos is paying Los Angeles prices for citrus, or picking up the wine, seafood and catamarans that South Africa asked to have exempted,” Saville explained.
He said there is a need to keep an eye on the African Growth and Opportunity Act, which expires on 31 December 2026, as South Africa’s place in it is being questioned in the Senate.
“America has appointed itself judge, jury and enforcer. It decides what counts as a foreign wrong, decides the penalty, and collects it. The World Trade Organization (WTO) exists to stop exactly that, and it tried: a panel ruled the same tactic illegal when Washington used it against China in 2020.
“Washington appealed, and since the appeals court has had no judges since 2019, the appeal goes nowhere, and the ruling doesn’t matter. The referee has been sent off the field!” Saville highlighted.
He added that the International Labour Organization (ILO) cannot help either. “It cannot fine anyone; it has used its strongest sanction three times in a century, and the United States never signed its forced labour treaty in the first place,” he stated.
Dr Noluthando Phungula, an international relations expert, said, Trade Policy is being utilised strategically by the United States to further its geopolitical agenda, and SA is not being spared.
“The relationship between Pretoria and Washington has been for the last couple of years under a lot of strain. Despite this, both parties remain committed to dialogue, engagement and common ground. Perhaps a key leverage point is focusing on shared economic and strategic interests. Ultimately, maintaining preferential access benefits both parties,” Phungula said.
She added that the US’s application of new Section 301 tariffs speaks to the tensions between national interests and multilateralism.
“Unilateral trade enforcement is certainly going to be an impediment and a setback for multilateral institutions such as the World Trade Organization (WTO) and the International Labour Organization (ILO). The section undermines the institutions’ key dispute resolution mechanisms by opting for unilateral action. This is a major setback for international norms,” Phungula stated.
She highlighted that the relationship hangs in the balance because SA has increasingly adopted positions that are against Washington’s preferences. These include the International Court of Justice (ICJ) matter, BRICS expansion, joint military exercises with Russia and China, and a non-aligned stance on the Russia-Ukraine war.
“The USA’s theatrics are increasingly highlighting the importance of multilateralism and moving away from unilateral dependence. This is a wake-up call for South Africa to diversify and deepen economic ties with other partners to reduce vulnerability,” Phungula said.
Dr Sanele Gumede, lecturer in the School of Accounting, Economics and Finance, at the University of KwaZulu-Natal, said policymakers and the economic cluster in Parliament should examine how South Africa’s economy can be restructured to capitalise on the growth of other developing countries.
He added that South Africa’s economy could be big, but it is limited by the fact that ‘we’ mainly trade with English-speaking countries, and ‘we’ do not trade much with other developing countries.
“South Africa must have its own growth strategy for Africa, especially countries that do not mainly speak English, as well as Eastern European countries that do not benefit much while being in Europe. If we trade with all these nations, we could significantly reduce the reliance on the US, because there will be many other players. This would push the US out of the top five trading partners of South Africa,” Gumede stated.
He highlighted that AGOA benefited the US because it was the US strategy for the African continent, and South Africa should develop its own strategy.
Gumede also encouraged businesses to look for new markets to trade with other than the US.
“Businesses must diversify their market by looking at what other markets they can approach without leaving South Africa. We can export to countries in need of products we produce. Businesses must take full advantage of the bilateral trade agreements that the South African government has been signing with various countries. Once the government has signed bilateral trade agreements with countries, trade doors open, and businesses can jump in immediately and start trading with those countries,” Gumede stated.
He highlighted that some countries end up buying South African products from the US, when SA businesses can actually sell directly to those countries.
Gumede also encouraged businesses to take advantage of technology such as online marketplaces for various sectors, where SA goods can be sold.
He highlighted that South Africa is not taking full advantage of its BRICS+ status, and there is no clear intention that the country wants to cut the umbilical cord from the US.
“What is seen at this moment is that we are not intentional about the BRICS+ membership. SA just got a loan from the World Bank, whereas we have a BRICS Bank. What it says is that we are now clients of the World Bank and giving it power instead of being our own clients, the BRICS+. Those are things that make us look like we are not intentional about this. Even other partners are seeing these signals that we are not intentional about our membership,” Gumede stated.
He noted that South Africa’s economic growth is not closely following the pattern of other developing countries.
“Our growth is just 1.1%. This is in line with these developed economies… They don’t grow. It symbolises that South Africa’s economic structure is heavily dependent on major developed economies. We don’t trade much with other developing countries, and this calls for the restructuring of the SA economy,” he said.
Gumede said that, as a low-hanging fruit, South Africa should explore more in the African Continental Free Trade Area (AfCFTA) and be intentional about our membership in BRICS.