South Africa Proposes $1 Billion US Gas Deal to Secure Duty-Free Car Exports

South Africa is proposing a major trade deal with the United States that could reshape its economic landscape — and avoid painful tariffs.

In a move aimed at reviving strained trade relations, South Africa has offered to import liquefied natural gas (LNG) worth around $1 billion annually from the United States. In exchange, it wants to secure duty-free access for 40,000 vehicles and hundreds of thousands of tonnes of steel and aluminium exports to the US each year.

This proposed deal comes just days after a tense public meeting between President Cyril Ramaphosa and US President Donald Trump in Washington, where the two leaders sought to repair ties and stabilise economic cooperation.

A Deal With Broad Impact

According to Minister Khumbudzo Ntshavheni, who detailed the proposal in a Sunday Times column, the deal would last a decade and include US investment in South Africa’s gas infrastructure — potentially even fracking.

In return, South Africa wouldn’t just send more cars to US shores. It would also benefit from tariff-free exports of 385,000 tonnes of steel and 132,000 tonnes of aluminium annually. Additionally, the deal includes provisions for US-bound automotive components from South Africa to enter without duties — a significant win for the local auto manufacturing sector.

Government officials say the potential value of the trade arrangement could reach between $900 million and $1.2 billion per year.

Balancing a Trade Deficit

This proposal is South Africa’s response to a mounting trade imbalance with the US and Washington’s threats to impose hefty 30% tariffs on South African goods. By agreeing to buy US gas, South Africa aims to strike a mutually beneficial arrangement — protecting critical exports while giving the US a new market for LNG.

Speaking through his spokesperson, Vincent Magwenya, Ramaphosa confirmed that the proposal was submitted to the US Trade Representative and is now subject to further negotiation.

In his weekly newsletter, President Ramaphosa highlighted the progress made during the Washington talks. “A key outcome was the creation of a new economic cooperation channel to engage the US on tariffs and trade,” he said.

Tense Politics, Tangible Progress

Despite the politically charged backdrop — including President Trump confronting Ramaphosa on camera with unverified claims about white farmers — both sides appear eager to stabilise the relationship. Ramaphosa described the trip’s main goal as reinforcing South Africa’s strategic economic partnership with its second-largest trading partner.

Further signs of thawing relations include Trump’s agreement to send a US delegation to the G20 summit hosted in Johannesburg later this year — an event he had previously threatened to boycott.

The Bigger Picture

South Africa’s proposed deal isn’t just about cars or gas. It’s a strategic move to boost investment, protect key industries, and anchor long-term trade with the United States amid global uncertainty.

With energy, minerals, and manufacturing on the table, this proposed deal signals a broader effort to diversify and strengthen South Africa’s global trade ties — and to keep critical export doors open in a time of economic fragility.

{Source: IOL}

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