When Washington tightened the screws with steep tariffs on South African exports, Pretoria found itself at a crossroads. No longer assured of duty-free access under AGOA, South Africa now confronts a 30% tariff regime from the United States on many goods. This abrupt removal of preferential access has triggered a rebalancing in trade relationships, and at the ninth annual South Africa-China Trade Promotion Conference, Chinese investment was cast not as an option but as a lifeline across mining, energy, infrastructure and manufacturing.
China, long a major trading partner, is now being courted more aggressively, and the rhetoric is matched with action. Chinese state-owned enterprises are committing substantial capital, localisation is being urged, and both sides indicate a willingness to reshape trade patterns that many see as asymmetric. As U.S. tariffs press on, China’s overtures appear calibrated to both fill the gap and deepen its footprint.
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Trade between China and Africa in 2024 reached approximately US$295.6 billion, up around 4.8 percent from 2023, according to data from China’s General Administration of Customs. Chinese exports to African countries totalled US$178.76 billion, whereas imports from Africa reached US$116.79 billion, representing a year-on-year increase of 6.9 percent in Africa’s exports. This has narrowed the trade deficit slightly.
Within that context, South Africa remains China’s largest trading partner in Africa, with bilateral trade of about US$52.4 billion in 2024.
At home, the cost of U.S. tariffs looms large. Exports from South Africa to the United States had been enjoying duty-free or reduced-duty access under AGOA, but the new 30% tariffs — effective from August 2025, threaten key sectors. Conservative estimates put 30,000 jobs at risk, with some forecasts suggesting possible losses as high as 100,000, particularly in agriculture and automotive industries. The unemployment rate in South Africa remains stubbornly high; in the first quarter of 2025 official measures were above 32 percent.
The composition of trade between South Africa and China mirrors much of Africa’s broader trade patterns with China. Minerals dominate South Africa’s exports to China, forming a large proportion of what Pretoria sells. Manufactured goods, electronics, machinery and vehicles largely make up Chinese exports into South Africa. This structure has drawn criticism, especially from South African policymakers who argue that it entrenches low value addition in South Africa’s export profile.
China’s recent investment pledges reflect these concerns. In Gauteng, for example, Baiyin Nonferrous Group, a Chinese state-owned enterprise, plans to invest 4 billion rand (approximately US$230 million) in Gold One’s gold mining operations. Concurrently the China-Africa Development Fund has eyes on independent energy transition projects in South Africa. Chinese companies are also pushing for localisation, including in automotive assembly, solar energy, and infrastructure development, in an effort to rebalance the trade and create more jobs domestically.
U.S. Policy, South African Fallout
The decision by Washington to impose tariffs up to 30% on many South African goods is being felt first in sectors that had benefited most from AGOA’s preferences: autos, agriculture, wine, fruit and other manufactured goods. The agricultural sector, particularly citrus, table grapes and wine, faces direct cost pressures, while exports of vehicles have plunged. Industry bodies warn that in many rural areas reliant on agricultural exports, the effects could be devastating.
Economists and leaders fear that unless there is swift mitigation, the damage will spread. Losses in export revenue, rising costs, job layoffs and shrinking household incomes risk depressing overall economic activity, especially in communities with limited alternative employment. The multiplier effect of job losses and lower demand in affected sectors could ripple through supply chains and service industries. Given South Africa’s already weak growth forecasts for 2025, these tariff shocks pose a substantial downside risk to macroeconomic stability.
China’s Strategy: Filling the Vacuum with Investment
China’s approach appears two-fold: shore up its own economic interests by deepening trade and securing raw materials, and step into the vacuum left by strained relations with the U.S. Chinese investment into South Africa in 2024 is reported at US$13.21 billion, with South African investment in China at about US$8.05 billion. These flows testify to the bidirectional nature of capital, even though the scale is asymmetric.
Chinese firms like Hisense, BAIC, Sinosteel, FAW, Seraphim Solar and China State Construction are increasing operations in South Africa. They are committing to more local procurement, exploring factory and assembly plant development, and leaning into energy transition projects where demand is rising due to electricity supply constraints and global climate imperatives. The South African government, through its trade ministers and deputy trade minister, is emphasising manufacturing, infrastructure, and clean energy as priority sectors for Chinese capital.
Risks, Discord, and the Hard Questions
Notwithstanding the momentum, serious risks must be managed. There is concern over the dependency on raw commodity exports which are volatile in global markets. If mineral prices fall, South Africa could suffer sudden downturns. Chinese investments tied to state-owned enterprises may come with conditionalities, expectations of local policy adjustment, or technology transfer “on China’s terms”.
There is the political dimension too: AGOA’s uncertainty and U.S. trade policy shifts reflect broader geopolitical competition. South Africa must balance maintaining diplomatic relations with the U.S., negotiating exemptions or better terms, and embracing China’s overtures without compromising sovereignty or long-term resilience. Infrastructure projects and energy transition programmes require skilled labour, stable regulation, and financing conditions that do not saddle South Africa with excessive risk.
Environmental and social sustainability also matter: mining investments impose land, ecological, and community costs; energy transition projects must ensure just transitions. Local content, labour rights, and environmental impact should not remain rhetorical.
What South Africa Must Do Next
South Africa’s path forward depends on strategy, not surrender. First, Pretoria should negotiate aggressively with the United States to preserve some of AGOA’s benefits or mitigate the broad-based tariffs’ effects. Diplomacy and trade law options may yield exemptions or phased terms.
Second, strengthening ties with China needs a careful plan: insist on local content, joint ventures, capacity building, and knowledge transfer so that the manufacturing base improves rather than remains in raw materials export. Investment in skills, infrastructure (roads, ports, power), and governance will determine how much of Chinese capital translates into enduring economic value.
Third, diversification of trading partners remains essential. While China offers both demand and investment, overreliance would leave South Africa vulnerable to supply chain changes, price swings, and geopolitical shifts. Expanding trade and cooperation with other global actors, regional partners in Africa, the EU, and others will spread risk.
Fourth, internal reforms must support investment: stable regulation, efficient customs, minimal corruption, clear land and labour laws, fast environmental approvals. Reducing cost and time to invest will make South Africa more competitive.
Deepening Ties, Not Blind Dependence
China and South Africa are moving closer under the pressure of U.S. tariffs, negotiating a bet on mutual investment that could offer both security and growth. The opportunities are real: in gold mining, energy transition, infrastructure development, and manufacturing. But opportunity unshaped can become burden. South Africa must use this moment to push for partnerships that build local capacity, safeguard jobs, and distribute benefits broadly.
If managed wisely, Beijing’s investing won’t simply fill the vacuum left by Washington’s tariffs; it could help South Africa leap to a higher level of industrial and economic sovereignty. If managed poorly, the country risks becoming more extractive, more vulnerable, more dependent. With the stakes so high, there is no room for complacency.
