{{item.videoDuration}}
{{item.title}}
{{item.text}}
{{item.videoDuration}}
{{item.title}}
{{item.text}}
The ripple effect: How the recent US tariff actions are shaking up South African exporters and importers
In recent months, US tariff hikes have shaken global trade dynamics, including those involving South Africa. A blanket tariff increase of 10% on all imports, with the potential for further increases up to 30% is forcing local exporters to explore alternative trade channels. For years the African Growth and Opportunity Act (AGOA) has provided South African agricultural products, such as citrus fruits, avocados, wine and nuts, preferential access to the US market. However, the uncertainty surrounding AGOA's future and the new tariffs threaten to unravel years of progress in the agricultural sector, especially for smallholder farmers.
Impact on industries relying on exports to the United States
Several key sectors in South Africa—such as steel, aluminum and automotive industries—have been directly affected by US tariffs. In response to these geopolitical shifts, organisations must adapt their operations. The 25% tariff imposed on steel and aluminum imports has disrupted global supply chains and increased manufacturing costs. This is evident as South Africa's—once-competitive steel industry—now faces mounting pressure due to these higher tariffs. Similarly, the automotive sector, which is a significant part of South Africa's export economy—Has been hit hard. The US is the third-largest destination for South African automotive exports, with over 25,000 vehicles shipped in 2024. The increased tariffs have led to higher costs and reduced competitiveness for South African automotive products in the US market.
New US tariff actions deepen global trade uncertainty
Recent USA executive orders regarding tariffs and the 90 days’ suspension on countries
Despite the widespread criticisms, the US administration has issued several executive orders that have further complicated the trade landscape. On 2 April, 2025, an executive order declared a national emergency due to large and persistent annual US goods, trade deficits and imposed additional ad valorem duties. This order included provisions for reciprocal tariffs, allowing the US to increase tariffs in response to retaliatory actions by trading partners. Subsequently, on 8 April 2025, another executive order raised the applicable ad valorem duty rate for imports from China, following China's announcement of an 84% tariff on US goods. To address the immediate impact of these measures on affected countries (with the exclusion of China), the US administration announced a 90-day suspension of additional tariffs beyond the base 10% tariff. While temporary, this pause offers a window of opportunity for South Africa to engage in strategic negotiations, safeguard key exports and explore new trade avenues.
How the tariffs are rewriting trade routes and supply chains
The imposition of US tariffs has disrupted trade volumes and supply chains, causing a decline in South African exports to the US due to higher costs. In response many South African businesses are exploring alternative markets within Africa, Asia, Europe and the Middle East to reduce dependency on the US market. The African Continental Free Trade Area (AfCFTA) Agreement is being leveraged to bolster intra-African trade and foster stronger regional economic integration. However, despite the challenges, industries are prioritising the transformation of raw materials into higher value finished goods to mitigate tariff exposure and drive innovation.
Fiscal and policy impact
The AGOA legislation has been renewed on different occasions, most recently in 2015, extending its validity to 30 September 2025. However, recent uncertainty and controversy has raised concerns about South Africa’s future eligibility.
There is a strong presumption that South Africa may be declared as a non-eligible country to AGOA at the next US Cabinet review. If this happens, South African producers and exporters will be subject to export duty when exporting to the US and overall transaction costs will rise. Additionally, US consumers will likely have to pay more for goods imported and US business may pay more on the importation of intermediate and final goods. Trade may be impacted as a result.
The US tariffs would likely affect key export sectors—especially the agriculture and automotive—which are vital for revenue and youth employment. With the US being South Africa’s second largest bi-lateral trading partner, these changes would have wide-reaching effects. Producers and exporters may see some decline in exports and where possible may need to reduce selling prices to the US to compensate for the higher landed costs in the US. Moreover, some sales may be lost as US buyers look to other sources, which may...lead to job losses in the country.
The new tariffs are expected to reduce economic growth and destabilise the country's economy. This would directly impact the revenue authority’s ability to meet its annual revenue collection targets, resulting in a budget shortfall, impacting public service and potentially necessitating cuts or adjustments in public service budgets.
SARS may consider implementing measures to enhance tax compliance to increase revenue collection, including more aggressive compliance programmes, stricter enforcement and increasing taxes rates.
[Bill H.R.1295 (became Public Law 114-27) - Trade Preferences Extension Act of 2015]
Opportunities for South Africa
The imposition of US tariffs has undoubtedly created challenges for South African exporters and importers. However, free trade agreements such as the AGOA and the AfCFTA present significant opportunities to mitigate these impacts. Despite the uncertainty surrounding AGOA's future, it remains a valuable tool for South African exporters to maintain competitiveness in the U.S. market.
AfCFTA, on the other hand, aims to create a single continental market for goods and services, with free movement of businesspersons and investments. By reducing tariffs and non-tariff barriers among African countries, AfCFTA can help South African businesses diversify their export destinations and reduce dependency on the US market. This agreement encourages intra-African trade, which can offset the negative impacts of US tariffs by opening up new markets within the continent. Additionally, AfCFTA promotes regional economic integration, which can enhance the resilience of South African businesses against global trade disruptions.
Planning tools South African traders can use
South African traders can leverage several planning tools to navigate the complexities of international trade and mitigate the impacts of US tariffs. These tools include:
Navigating the new trade reality: Customs strategies for business resilience
To remain competitive amidst shifting tariff landscapes, South African companies can adopt several customs strategies:
Turning the tide: South Africa can lead amid global tariff shifts
While the evolving tariff landscapes present significant challenges for South African businesses, it also opens doors for us to diversify, innovate and strengthen our global position. By leveraging free trade agreements like AGOA and AfCFTA, utilising planning tools and adopting strategic customs and pricing strategies, South African traders can navigate the complexities of international trade and remain competitive. The recent 90-day suspension of additional US tariffs provides a critical window of opportunity for businesses to reassess their trade approaches and build new partnerships—both regionally and beyond. With resilience, strategic thinking and a focus on long-term value, South Africa is well-positioned not just to withstand global shifts, but to thrive in a changing trade environment.
Author
{{filterContent.facetedTitle}}
{{contentList.dataService.numberHits}} {{contentList.dataService.numberHits == 1 ? 'result' : 'results'}}
{{contentList.loadingText}}
{{contentList.loadingText}}
