SOUTH AFRICAN FARMERS PLAY CHICKEN WITH TRUMP TARIFFS
For years, the two countries have fought over poultry: Washington has kept South African poultry out on health and sanitation grounds while Pretoria accuses US farmers of dumping chicken at below-cost prices and has imposed tariffs.
When Pretorius set up his first chicken coops 27 years ago, he said competition from foreign imports wasn’t an issue.
Trade Minister Davies said when the White House announced tariffs of 25 per cent on steel and 10 per cent on aluminium this year claiming imports threatened its national security, Pretoria sought an exclusion.
South Africa’s steel and aluminium exports to the United States last year were worth more than $650 million, according to South Africa’s Trade Law Centre.
But since they constituted just one per cent of US steel and a little over one per cent of its aluminium, they represented no threat to the United States, South Africa argued.
“We were just told that we were out. We were not going to be considered for exemption. The tariff was going to apply to us,” Davies said.
Now that SAPA has filed a lawsuit to force a suspension of the poultry quota, the South African government finds itself in an awkward position. If the anti-dumping tariff is reapplied, South Africa risks retaliation from Washington which could have a more far-reaching impact on the economy as a whole.
The USAPEEC’s Sumner told Reuters his group would lobby the US government to take action if the quota is revoked over the metal tariffs.
“It has absolutely nothing to do with poultry trade between the US and South Africa,” Sumner said. “SAPA is trying to be opportunistic here and to increase trade frictions unnecessarily.”
South African meat importers also oppose any suspension of the quota. They say it would push up prices for consumers and could provoke Washington’s wrath.
“It’s quite possible the Trump administration would take South Africa on,” said David Wolpert, CEO of the Association of Meat Importers and Exporters of South Africa.
The form of any possible US retaliation is unclear for now.
“We cannot speculate on what South Africa may or may not do with respect to its tariffs and non-tariff barriers,” a US State Department official wrote in response to Reuters’ queries. But analysts and South African officials worry the country’s AGOA benefits may be in danger, again.
Washington used the threat of a withdrawal of AGOA benefits to press Kenya, Uganda, and Tanzania to roll back tariffs last year on second-hand clothing from the United States. Rwanda refused and its AGOA benefits were curtailed in July.
A blanket suspension of South Africa’s AGOA status would hit the transportation equipment industry hardest. About 85 per cent of its nearly $1.4 billion in exports to the United States were covered by AGOA last year.
Ultimately, with legal action pending, the South African government’s hands may be tied. And despite the broader economic implications, South Africa’s poultry industry is standing firm. “We agreed something to benefit the South African industries. And that benefit has been taken away ... We just want what’s fair,” SAPA’s Stander said.