US tariffs will test SA's economic resilience

ON AUGUST 1, the US will impose a 30% tariff on select South African exports, a move the Trump administration frames as a corrective to “trade imbalances” but which South Africa decries as a unilateral overreach.

- NYANISO QWESHA

President Cyril Ramaphosa has rejected the US justification, noting that 77% of US goods enter South Africa duty-free, with an average tariff of just 7.6%.

Yet, the policy threatens to derail South Africa's fragile economic recovery, destabilise global supply chains, and escalate protectionist tensions worldwide. This article examines the tariff's sectoral impacts, systemic risks to multilateral trade, and strategic responses to mitigate the fallout.

Sectoral impacts

1. Automative

South Africa’s automotive sector, a beneficiary of the African Growth and Opportunity Act (AGOA), faces existential risk.

Reuters reported that the US absorbed 6.5% of South Africa's vehicle exports (worth $1.8 billion in 2024) and is a critical market for manufacturers like BMW and Ford. The 30% tariff could force plant closures and mass layoffs, eroding a sector contributing 5.2% to GDP.

2. Agriculture

• Citrus: The US accounts for 5-6% of South Africa's citrus exports ($100 million annually), supporting 35 000 jobs. Tariffs may cede market share to Chile and Peru.