Almost 30 church leaders in the Eastern Cape sent a joint letter to President Cyril Ramaphosa and premier Oscar Mabuyane, urging them to secure a favourable deal with the US urgently to mitigate the potentially devastating impact of the expected tariffs on the region.
The new 30% tariff rate is expected to kick in on Friday unless a trade deal is struck.
“We write to you as church leaders based in the Eastern Cape, representing a wide network of congregations and denominations across the province.
“The Eastern Cape is one of the most socioeconomically vulnerable regions in our country.”
They said SA already bore the distinction of having the highest unemployment rate globally — higher even than conflict-affected areas such as Gaza and Somalia.
“Within this context, Nelson Mandela Bay stands out with an unemployment rate that is likely the highest of any city in the world.
“Alarmingly, the GDP per capita in our province, in dollar terms, is lower than it was in 2007.”
They said residents were poorer than 18 years ago, and malnutrition levels were among the highest nationally in the city.
“Every year, 80% of our province goes hungry at some point.
“The consequences of these tariffs for our province will be devastating.”
They said the city’s economy was heavily reliant on two key sectors, which were the automotive and citrus industries.
“The Mercedes-Benz SA plant in East London, which exports 90% of its production to the US, will be at serious risk.
“If it becomes economically unviable, this will not only impact East London but also Nelson Mandela Bay and the numerous supply chain businesses that rely on this manufacturing ecosystem.”
They said the citrus industry, which earned more foreign exchange for SA than even the motor vehicle sector, was another pillar of the economy.
“It is a significant source of employment for semi-skilled and unskilled workers.
“The repercussions of disrupted exports in this sector would be catastrophic for thousands of families.
“Our churches are already on the frontline of addressing food insecurity and poverty.
“However, the scale of this challenge is becoming unmanageable.
“Should these tariffs be enacted, the burden on communities and support structures — both religious and civic — will become unsustainable.
“In light of this, we urgently and prayerfully appeal to you and your cabinet to prioritise reaching a diplomatic resolution with the US government.”
The letter was signed by bishops and pastors alike.
Meanwhile, the government is offering the motor vehicle and agricultural sectors alternative markets and possible Treasury-backed tax incentives, a two-pronged contingency plan to keep production lines humming if the US raises a 30% tariff wall on SA exports.
“As it stands, if a 30% trade tariff from the US is imposed, we have put in place alternative mechanisms, so we are able to avert a crisis,” trade, industry and competition spokesperson Kaamil Alli said.
Mabuyane said the provincial government was cautiously optimistic that ongoing engagement between Ramaphosa and US President Donald Trump would lead to a positive trade agreement.
“The national government has engaged the US and presented proposals that seek to maintain SA’s trade relationship so that local companies, including those in the Eastern Cape, continue exporting products to the US economy.
“In this engagement, the US has also indicated products they wish to import into our country from factories and assembly plants in their country.”
He said trade deals were regulated by law and were based on the national interests of each country.
“They are about sustaining and creating jobs, growing investment, as well as growing the economies of both countries.
“Our interest is to ensure that workers don’t lose their jobs, businesses contracted to OEMs and any business exporting to the US market don’t lose their contracts.
“It is one of our key interests and stated objectives to ensure that any investment opportunity that is an outcome of a possible trade agreement with the US must have opportunities for workers, local businesses and communities.
“Because the trade framework that our government has worked on together with our US partners is focusing on a lower tariff rate than what was announced earlier, we are confident that it will benefit South Africans and Americans mutually.
“I will continue working with our social partners in the province to put in place measures to protect our economy.”
He said the government was alert to the need to diversify markets for products manufactured in SA.
“Our main interests are in the automotive manufacturing and assembly, agriculture, shipbuilding and agro-processing sectors.
“The US is a priority market for SA goods and a key source of investment.”
The Herald
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.