Tariffs on SA Exports: How Can Local Businesses Prepare for the Impact
South African import and export businesses face a challenging environment due to potentially significant tariffs imposed by US President Donald Trump.
According to Trade and Industry Minister Parks Tau, there are also indications that South Africa may need to submit a revised trade agreement, which would suggest a shift in the deadline.
The tariffs, initially announced at 30% and currently under review with a temporary 10% rate for many goods, fundamentally alter the economic landscape for South African businesses. They erode price competitiveness for exporters, making South African products more expensive for foreign buyers compared to alternatives.
South Africa has asked for more time to negotiate a trade deal with President Trump’s administration before his higher tariff regime goes into effect on July 9, the Department of Trade and Industry said on Tuesday.
a cross-border payments provider, has put together practical advice to help businesses navigate these complex trade policies, should they become a reality.
“The imposition of tariffs on South African exports creates a complex and challenging environment for local businesses,” saysWhile there’s a temporary 10% rate on many goods, the initial announcement of 30% and the ongoing 90-day review period mean businesses must prepare for potentially significant cost increases. Our goal is to equip South African importers and exporters with strategies to mitigate these impacts and maintain their competitiveness.”
This forces exporters to either absorb costs, risking profitability and job losses, or pass them to consumers, which could significantly reduce demand and market share. For importers, retaliatory tariffs could increase input costs for manufacturers, potentially leading to higher consumer prices and inflation. The weakening Rand, often a result of trade tensions, further exacerbates import costs.
“These tariffs are designed to target South Africa’s manufactured goods, especially sectors like automotive and metals, undermining our industrial capabilities by limiting access to export markets for processed products,” explains Coetzee.
“The removal of AGOA benefits further complicates matters, as our goods no longer enter the US duty-free. This impacts profit margins, contributes to currency instability, and increases the risk of a global economic slowdown.”
Despite these challenges, Coetzee highlights that critical minerals like Platinum Group Metals and titanium are largely exempt from higher tariffs, representing a significant portion (76%) of South African exports to the US. Additionally, US tariffs on South Africa’s competitors offer a degree of trade advantage.
Practical advice for South African importers and exporters:
Coetzee offers the following strategies for businesses to navigate the current climate:
To unlock significant growth, businesses should look to the dynamic markets of East and West Africa, believes Coetzee.
