South Africa's Strategic Response to U.S. Tariff Challenge

South Africa on Monday unveiled specific support measures for local companies expected to bear the brunt of a steep 30% U.S. tariff, set to take effect this week. These measures include planned exemptions from certain competition rules and the provision of financial support facilities.

Officials have categorically denied suggestions that the tariff hike is a result of South Africa's affirmative action policies, which have previously been criticized by U.S. President Donald Trump. Despite extensive negotiations and proposals to purchase U.S. liquefied natural gas alongside a $3.3 billion investment in U.S. industries, Pretoria's efforts to secure a more favorable deal fell through.

As a response to potential job losses and economic impact, especially in agriculture and the automotive sector, South African trade and foreign ministers announced the development of a 'block exemption' under the Competition Act. This will allow for collaboration among competitors. Additionally, a comprehensive support program is being formulated to include working capital and equipment facilities, aiming to mitigate job losses through the Unemployment Insurance Fund.

(With inputs from agencies.)