African exporters have welcomed a temporary reprieve from new US tariffs, after President Donald Trump suspended a planned 30 percent import tax for 90 days but the bigger picture remains uncertain.
South Africas citrus industry the worlds second-largest is among those relieved to have narrowly avoided being hit by the new tax, at least temporarily.
We feel some relief, especially because this came just as we were starting to pack and export fruit to theUnited States, Boitshoko Ntshabele, head of the country's Citrus Growers Association, told RFI.
Were now facing a 10 percent tax the same as our competitors. But we keep sayingSouth Africashould be exempt, because our exports come off-season compared to US citrus production.
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Tariffs 'nullify AGOA'
The car industry has been less fortunate. A global 25 percent tariff on auto imports remains in place.
Uncertainty brings a degree of reluctance to make decisions to invest capital, build factories or do all the things that create jobs, Ayabonga Cawe of South Africas International Trade Administration Commission told RFI.
Its a major concern for us. But were not alone its not just South Africa.
The US is the third-largest buyer of South African-made vehicles, importing around 25,000 cars each year, worth roughly 35 billion rand (1.8 billion).
Around 86,000 jobs in the auto sector depend directly onAGOA, the African Growth and Opportunity Act, which has given African countries duty-free access to the US market since 2000.
But the new 10 percent tariff has reduced its positive effects. South Africas trade minister Parks Tau told French news agency AFP that the baseline tariffs essentially nullify AGOA benefits.
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Relief in Cote dIvoire and Madagascar
Cote dIvoire, from which 4 percent of trade flows go to the US, sees the delay in the application of the tariffs as a chance to avoid further damage.
Its the consumers who will ultimately bear the consequences, so we dont lose, said agriculture minister Kobnan Kouassi Adjoumani, in an interview with RFI.
InMadagascar, where some goods were facing a 47 percent import tax, the business community has also welcomed the reprieve.
Its a relief for the country, the private sector and the administration too, said Ernest Lainkana Zafivanona, director general of Madagascars Customs, the government agency responsible for overseeing imports and exports. It gives us some time to enter into negotiations.
The countrys trade minister, David Ralambofiringa, has told journalists that AGOA still applies for the time being.
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Smaller economies at risk
However, experts warn that the 90-day pause may not be enough for countries that rely heavily on AGOA, especially if the US decides not to renew the deal when it comes up for review in September.
Textile exports will be massively hurt and the 25 percent tariff on car exports is very problematic for South Africa, warned Alex Vines, director of the Africa programme at international affairs think tankChatham House.
Mauritius, Madagascar,Lesothoand South Africa in particular will be impacted.
In Lesotho, where the textile industry has long been seen as an AGOA success story, the stakes are especially high.
The industry makes up about 10 percent of the countrys gross national income, and up to 40,000 jobs are on the line if the deal is scrapped, the countrysKing Letsie IIIsaid last month.
Behind the scenes, African governments are now working to secure fresh trade deals with the US, while also looking for new markets for their exports.
Originally published on RFI
