SA faces economic turmoil as US tariffs signal end of Agoa's beneficial status

Beginning August 1, the Trump Administration will levy a staggering 30% tariff on all SA products entering the US

- SIPHELELE DLUDLA

INDUSTRY players have warned of the wide-ranging implications resulting from the hefty import tariffs imposed by the United States on the country's products.

Beginning August 1, the Trump Administration levied a staggering 30% tariff on all South African products entering the US, potentially reversing the many benefits gained under the African Growth and Opportunity Act (Agoa).

Economists and industry leaders are concerned that this sweeping tariff policy, which applies indiscriminately to “any and all South African products,” could spell disaster for key sectors reliant on the US market.

Major South African exports to the US include precious stones and metals, motor vehicles, parts and accessories; iron and steel, machinery; aluminium products, ores, organic chemicals, edible fruit, chemical products and nickel products. This uncertainty is compounded by the impending expiration of Agoa in September, with no guarantee that Congress will renew the deal.

If the full 30% tariffs are imposed on South Africa in early August despite exclusions or reduced tariffs on metals and minerals, South Africa's large vehicle and agricultural export sectors will come under particular pressure.

North West University Business School economist, Prof Raymond Parsons, noted the heavy economic headwind these tariffs create.