The ANC subcommittee on economic transformation is proposing that the country consider offering financial support to businesses likely to struggle with the high tariffs introduced by US President Donald Trump.
In a document presented earlier this month to the national executive committee (NEC), the party characterises the fund as being similar to the Covid-19 package, which was introduced to distressed businesses during the pandemic.
However, the document does not give details as to how the fund will be administered, how much money will be pumped into these businesses and who will qualify for assistance.
This is in line with action taken by other countries, including the European Union.
Recently, the Spanish government announced a €14.1-billion plan to cushion its economy from the tariffs, while the EU has set up a fund financed by revenues from tariffs on imports to the US.
The ANC is also seeking means to close the gaps, which will affect the economy by decreasing its dependence on developed countries through a butterfly strategy.
The party laments that the reliance on Western powers is exposing South African industries to “geopolitical shocks and tariff aggressions, as shown by the recent US actions”.
“The ‘butterfly approach’ prioritises the implementation of the African Continental Free Trade Area and unlocking opportunities in the rest of Africa as the foundation of our global engagements, with the ‘wings’ representing additional expert initiatives in the rest of the world, focusing on leading and established markets as well as new and emerging market opportunities,” the report reads.
The ANC’s strategy includes capitalising on existing trade agreements and targeting at least 30 countries, including those in the Middle East, as a means to increase exports.
They also believe that there should be increased trade among Brics Plus nations. These countries include China, Mozambique, Nigeria, Japan, Switzerland and Germany.
The US imposed 30% tariffs on South Africa, which will deal a blow to crucial automotive, steel and photo-processing industries.
However, the document makes it clear that negotiations with the USA are ongoing.
