Trade under duress: Assessing South Africa’s trade diversification toward China in response to U.S. tariff actions

Godfrey Kamutando (), Vincent van der Westhuizen () and Matthew Stern ()
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Godfrey Kamutando: DNA Economics
Vincent van der Westhuizen: DNA Economics
Matthew Stern: DNA Economics

No 331, ERSA Working Paper Series from Economic Research Southern Africa

Abstract: This paper examines the scope for South Africa (within SACU) to diversify its exports toward China in the context of rising global trade tensions and increased policy uncertainty, particularly following the imposition of tariffs by the United States. As traditional export markets become more volatile, the need for strategic diversification toward fast-growing economies has become more urgent. China, given its scale, sustained demand growth, and central role in global trade, presents a key opportunity for reorienting South Africa’s export strategy. Using a combination of descriptive trade analysis and a partial equilibrium (SMART) modelling framework, the paper assesses the potential trade effects of tariff liberalisation under a potential SACU–China free trade agreement (FTA). The results indicate that the aggregate export response is relatively modest, with SACU’s exports to China increasing by approximately 4%. This reflects the structure of existing trade, where the bulk of exports, primarily minerals and precious metals, already face low or zero tariffs, limiting scope for further expansion along the intensive margin.

Keywords: Trade; Exports; South Africa (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 O53 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2026-05
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Published in ERSA Working Paper Series, May 2026, pages 46

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Persistent link: https://EconPapers.repec.org/RePEc:rza:ersawp:331

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