The Office of the United States (US) Trade Representative has announced that it will investigate several economies under Section 301(b) of the Trade Act of 1974. South Africa is among the countries included in the probe.

According to a statement from the representative’s office, Section 301 can be used to respond to “unjustifiable, unreasonable, or discriminatory practices that burden or restrict US commerce”.

The investigation may therefore come to focus, among other things, on how South Africa’s empowerment policies are applied to foreign companies. One question that will arise is whether the manner of application of the policy aligns with the "reciprocity" America expects of its trade partners.

Reciprocity in this context means that countries do not make demands of American firms that America would not make of firms from that country.

Another question that may arise is whether American firms face different requirements compared with companies from other countries operating in the South African market.

There is a Chinese angle to that question rooted in earlier legal disputes over the status of Chinese South Africans under empowerment legislation. In 2002, the Chinese Association of South Africa sought clarity from the government on how people of Chinese origin were classified under empowerment and employment equity laws. After receiving no clear response, the association launched legal action.

In the case The Chinese Association of South Africa and others v Minister of Labour and others, the North Gauteng High Court ruled on 18 June 2008 that South African Chinese people should be included in the definition of “black people” under the Employment Equity Act and the Broad-Based Black Economic Empowerment (B-BBEE) Act.

However, amendments to the B-BBEE Act in 2013 limited that definition. Chinese individuals who were not born in South Africa or descended from citizens before 27 April 1994 do not qualify as “black people” under the legislation.

As a result, Chinese nationals from mainland China, Hong Kong, or Taiwan who later immigrated to South Africa are not eligible for empowerment benefits, whereas companies owned or partially owned by Chinese nationals who can demonstrate South African descent are.

Analysts say these distinctions could draw attention if US authorities examine how empowerment rules affect American companies relative to other foreign investors.

The investigation will play out amid continuing diplomatic tensions between Washington and Pretoria over issues ranging from property rights to empowerment policy and foreign relations.

The US, most recently through its new ambassador to South Africa, Leo Brent Bozell III, has asked South Africa to reconsider its empowerment and property rights policies. Serious economists understand that in as far as these policies tax capital and threaten investor security they are central to explaining why South Africa’s rate of fixed investment sits at just half that of its emerging-market peers.

The low investment rate in turn translates into the low rate of economic growth that underpins South Africa’s high unemployment rate. At over 30%, that rate is almost six times the global average for 2026. Last month South Africa’s official statistical agency reported that the economy had grown by just 1.1% in 2025, which was just a third of the global average.

Despite shrill criticism of Bozell from the legacy media and politicians invested in the rent-seeking attached to these policies, polling data continues to show that strong majorities of South Africans themselves would welcome a reform of empowerment policy and the securing of property rights.