US Supreme Court Tariff Ruling Leaves South Africa Exposed to Continued US Pressure

In a client note, advisory firm Frans Cronje Private Clients says the US Supreme Court striking down certain Trump tariffs will have little practical impact for South Africa because Washington can still impose tariffs through other legal routes and continue applying pressure through measures such as African Growth and Opportunity Act (AGOA) exclusions. In addition, the firm argues that even a temporary reversion to early 2024 trade conditions would have a negligible effect on South Africa’s GDP.

According to the firm, “even though the US Supreme Court has struck down certain Trump tariffs the practical effect will be limited”, warning that Pretoria should not treat the judgement as a turning point in the bilateral trade relationship.

The note says South Africa’s foreign policy team “had been banking on the court to strike down tariffs as a justification to delay striking a deal with Washington”. In the South African view, a deal did not have to be struck with the Americans as the court would remove the tariffs, allowing South Africa to again benefit from the pre-Trump trade regime. As a consequence, the South African government was happy to delay, obfuscate, and generally mess the Americans around even as scores of other nations struck new trade deals with Washington.

The note stresses the narrow legal basis of the court decision, stating that “the court ruling relates to tariffs applied under the International Emergency Economic Powers Act”. It adds that alternative authorities remain available, citing discussions with trade contacts. “We have spoken to some well-placed trade people who confirm that the administration has a host of other legislative frameworks via which to continue applying tariffs,” the note says, adding that tariffs could still be applied on grounds “ranging from a national security justification, to a reciprocity justification, a congressional statute, or a sector-specific programme”.

On that basis, the firm concludes that “the court ruling does not put South Africa in the clear”. “We don’t think much changes and that the administration will continue applying pressure on SA, including through AGOA exclusions and the like,” the note says.

The note also argues that AGOA should not be overstated as a growth lever. “AGOA is an aid programme for poor countries and tariff levels on berries and the like are hardly going to move the dial on SA GDP,” it says.

Instead, the firm argues that what South Africa needs is “a broad new trade and investment pact”, but that this “remains out of reach given the tenor of the relationship”, and that “the calculus there has not been altered by the Supreme Court ruling”. If anything, the fact that the South Africans had been willing to mess the Americans around while waiting for the court ruling has likely greatly worsened their standing with Washington.