How should a developing country such as South Africa respond to the USA's "Liberation Day" Tariffs of April 2025 and subsequent shocks? In this paper, we argue that a retaliatory tit-for-tat trade war is futile. Consequently, we identify an alternative strategic policy response beyond retaliation. Combining the GTAPDynamic (GDyn) Computable General Equilibrium model with an expanded Decision Support Model (DSM), we simulate five policy response scenarios over the period 2017–2030. Our results demonstrate that a passive response to US protectionism is the least attractive option. However, a comprehensive policy mix comprising expansionary monetary policy (to induce exchange rate depreciation), unilateral tariff reduction (to lower input costs), and targeted export promotion (to diversify exports) can take South Africa’s real GDP growth back to rates last seen during 2004 to 2007 (at around 5.51% in compound annualized growth (CAGR) terms) by 2030, resulting in a surge in unskilled employment through an investment-led boom in sectors like construction and metals of around 9.8% CAGR by 2030. The results confirm that, following this path, South Africa can effectively counter Trump's trade shocks.

In this paper we explain the extended Decision Support Model (DSM) methodology, operationalized through the AEXI Market Finder, which is designed to identify realistic export opportunities from large international trade datasets, such as that of UN Comtrade and CEPII-BACI. Grounded in the scientific literature on the need for and determinants of exports - specifically New New Trade Theory, the Balls-and-Bins model, and the Gravity Equation, we argue that best practice in export promotion must prioritize the provision of information to reduce frictions and correct market failures caused by information asymmetries. We then describe the extended DSM, which processes global trade data through four distinct filters.

Furthermore, we compare the DSM’s elimination-based approach to the estimation-based gravity models used by the International Trade Centre (ITC), highlighting the DSM’s distinct ability to incorporate risk and realistic transport costs and transit dimensions, and to support innovation in export marketing. We conclude by discussing the limitations of the approach and offering recommendations for future research.