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29 Aug, 2018 13:21

Trump’s tariffs may kill farming in South Africa sooner than land confiscation

Trump’s tariffs may kill farming in South Africa sooner than land confiscation

Last week, US President Donald Trump expressed deep concerns over alleged land seizures and “large-scale killing of farmers” in South Africa, and even ordered the secretary of state to closely study the issue.

However, it’s not the land reform (currently on hold pending further review) which is seen as a real threat to some farmers. Rather, it is Trump’s ‘America First’ trade strategy.

For many years, Washington and Pretoria were at odds over poultry, with the US banning South African produce due to health and sanitation issues and South Africa keeping American chicken under anti-dumping tariffs. 

Three years ago, the South African poultry industry agreed to drop the tariffs from 65,000 tons of US chicken in exchange for the renewal of broader duty-free US trade access. The measure helped other South African industries which benefited from mutual trade.

However, the current US agenda, which includes the decision to introduce export duties on steel and aluminum, has brought the poultry strife back on the table, putting at risk $2 billion of South African exports to the US under the African Growth and Opportunity Act (AGOA). The legislation, approved by the US Congress in 2000, was aimed at assisting the economies of sub-Saharan Africa and to improve economic relations between the US and the region.

“We cannot compare our chickens with theirs. The price difference will kill us,” a South African pullet rearer, Herman Pretorius, told Reuters.

Last week, the South African Poultry Association (SAPA) filed a lawsuit against the country’s government, demanding the suspension of the US poultry tariff exclusion quota. The poultry farmers reportedly say the 2015 chicken deal is void, as South African metal producers lost tax-free access to the US market despite the AGOA agreement, which used to give exemption to the country’s aluminum exporters.

“We’ve pulled the trigger,” Marthinus Stander said as quoted by the agency. “The quota should be suspended if any of the benefits that South Africa enjoyed at the time of the renewal of AGOA are suspended. This has happened to steel and aluminum which used to be duty free under AGOA.”

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