S. African businesses call for diversifying economy

South Africa needs to diversify its economy, boost domestic consumption and increase collaboration with potential trade partners to cope with the high tariffs imposed by the United States, observers said, while calling for more efforts to protect the "rules-based trading system".

Alan Mukoki, CEO of the South African Chamber of Commerce and Industry, said the government and businesses in South Africa are concerned with the US tariff policies and urged the authorities to take measures to cope with it.

The US slapped a 31 percent tariff on South African goods on April 2. One week later, US President Donald Trump said that he was pausing tariffs above 10 percent for most US trading partners.

Mukoki said that South Africa should work toward developing a huge domestic market to reduce reliance on exports and address education with a focus on science and technology, engineering, mathematics, manufacturing and industrialization, and developing infrastructure, to help develop the local market.

More than 7 percent of South Africa's total exports went to the US last year, while South Africa accounted for just 0.4 percent of total US imports.

"South Africa will leverage the African Continental Free Trade Agreement, or AfCFTA, to bolster intra-African trade, fostering stronger regional economic integration and cooperation," said Ronald Lamola, South African minister of international relations and cooperation.

"This approach aligns with the national interest of contributing to a better Africa and world. Efforts will intensify to diversify export destinations, targeting markets across Africa, as well as in Asia, Europe, Middle East and the Americas."

Sizo Nkala, a research fellow at the University of Johannesburg's Centre for Africa-China Studies, said the tariffs imposed on many countries last week by the US represent a "dark day" for the global economy.

"South Africa's response to the unjustified US tariffs is quite reasonable and comprehensive," he said. "It emphasizes the revitalization of regional trade through the AfCFTA, diversifying trade alliances by deepening ties with potential export markets like the European Union, Asia and the Middle East, among others, negotiating sectoral trade deals with the US and building both domestic manufacturing and consumption capacities to reduce reliance on exports."

Tariffs on South Africa and other countries will affect the global economy and economic growth, Nkala said.

"South Africa must take advantage of its G20 presidency to drive conversations on the protection of the rules-based trading system and the improvement of the World Trade Organization," he said.

Mabalane Mfundisi, the C20 Sherpa for the G20, said the US should work with other countries to build a better world. "We need each other in this world, America cannot survive on its own, it needs others," he said.

The writer is a freelance journalist for China Daily.