South Africa announced Monday it plans to buy liquefied natural gas from the United States in a proposed deal worth around $1 billion annually, following tense talks between President Cyril Ramaphosa and US President Donald Trump at the White House last week.
The 10-year agreement would see South Africa avoid paying duty on exports of 40,000 vehicles a year to the United States, according to cabinet minister Khumbudzo Ntshavheni. The proposal represents South Africa’s attempt to preserve vital trade benefits under the African Growth and Opportunity Act (AGOA) while addressing Trump’s focus on reducing US trade deficits.
The deal comes after an extraordinary White House meeting on May 21 where Trump confronted Ramaphosa with what he called evidence of “genocide” against white farmers in South Africa, dimming the lights in the Oval Office to show videos supporting his disputed claims. Despite the hostile reception, Ramaphosa maintained diplomatic composure throughout the encounter, which South African-born billionaire Elon Musk observed from behind a golden sofa.
“These are numbers contained in the trade deal proposal that South Africa has presented to the USTR (US Trade Representative) for consideration and further negotiations,” Ramaphosa’s spokesman Vincent Magwenya told AFP.
The proposed LNG imports would help South Africa diversify its energy sources while potentially saving the country’s crucial automotive exports to the US. South Africa’s exports of vehicles and parts to the United States are estimated at over $2 billion and could be hard hit by Trump’s planned 25% tariff on automobile imports.
Automobile exports from South Africa accounted for 64% of the country’s exports under AGOA in 2024, making them a significant component of products currently benefiting under the preferential programme. South Africa’s vehicle exports to the US increased by 1,643.6% in the first year of AGOA, from 853 units in 2000 to 14,873 units in 2001.
Trade Minister Parks Tau described the deal as critical for preserving jobs in South Africa’s automotive sector, which employs over 100,000 people. The industry has been a cornerstone of South Africa’s AGOA benefits, with the value of its automotive sales to the US increasing by 447.3% between 2001 and 2022 under the trade agreement.
Ramaphosa said in his weekly newsletter Monday that a key outcome of the talks was “agreement on an economic cooperation channel between the US administration and South Africa to engage further on tariffs and a broad range of trade matters”.
The president emphasized potential for expanding bilateral trade beyond gas imports. “There is potential to increase and diversify trade between our two countries in areas such as gas, mining and critical minerals, agriculture and nuclear products,” he said.
The deal also secured US participation in the G20 summit in Johannesburg in November. Trump had threatened to skip the meeting hosted under South African presidency this year, as ties frayed over domestic and international policy issues.
South Africa’s diplomatic initiative comes amid growing uncertainty over AGOA’s future. The trade programme, which provides duty-free access to US markets for eligible African countries, is set to expire in 2025 and faces an uncertain renewal under Trump’s administration.
The US relies on South Africa for critical minerals, importing nearly 100% of its chromium from the country as well as over 25% of its manganese, titanium, and platinum. This dependency could provide leverage for South Africa in trade negotiations, particularly given global supply chain concerns.
The LNG proposal represents a significant shift for South Africa, which has historically relied heavily on coal for electricity generation. The country has been exploring cleaner energy alternatives amid ongoing power shortages and international pressure to reduce carbon emissions.