In a significant move impacting South Africa’s trade relations with the United States, a new import tariff of 30% has been introduced.
This announcement follows an earlier 25% duty imposed on auto imports from all countries on March 26, raising concerns over the future of duty-free exports under the African Growth and Opportunity Act (AGOA).
Regarding South Africa, an official White House Fact Sheet released on Wednesday explained the tariff increase:
“For decades, South Africa has imposed animal health restrictions that are not scientifically justified on US pork products, permitting a very limited list of US pork exports to enter South Africa.
South Africa also heavily restricts US poultry exports through high tariffs, anti-dumping duties, and unjustified animal health restrictions.
These barriers have contributed to a 78% decline in US poultry exports to South Africa, from $89-million in 2019 to $19-million in 2024.”
US Industry Perspective
Dan Halstrom, President and CEO of the US Meat Export Federation (USMEF), applauded the clarity offered by the administration’s recent executive order. However, he emphasised the uncertainty surrounding potential reactions from trading partners.
Halstrom expressed hope that South Africa and others would prioritise eliminating trade barriers instead of enacting retaliatory measures.
While some sources within the US poultry industry reported no unresolved issues regarding imports into South Africa, trade experts highlighted the broader implications of the tariffs.
Impact on South African Exports
Donald MacKay, head of XA Global Trade Advisors, commented that the newly implemented tariff, coupled with the earlier 25% auto duty, significantly undermines South Africa’s competitive edge in exporting to the US.
South Africa’s platinum group metals (PGMs), along with manganese, coal, and gold, escaped the latest tariff increases. Together, these minerals constitute 76% of South Africa’s mineral exports to the US.
However, Hugo Pienaar, Chief Economist at the Minerals Council South Africa, warned of potential ripple effects, explaining that even PGMs may face indirect consequences due to declining vehicle sales affecting demand for autocatalysts.
Agricultural exports, including macadamia nuts, citrus fruits, and wine, face immediate challenges like pricing uncertainties, renegotiations, and delays. These disruptions threaten employment, logistics, and port operations across the supply chain.
Automotive Industry Under Pressure
The South African automotive sector faces considerable strain from the recently imposed 25% blanket tariff on imported vehicles.
This measure is likely to deter investments in advanced manufacturing, according to MacKay. BMW and Mercedes-Benz, which are prominent exporters of vehicles to the US, are particularly vulnerable to this development.
While it is believed that the 30% duty won’t compound the earlier auto tariff hike, the automotive sector remains at a disadvantage. The existing 25% duty alone may be sufficient to erode the competitiveness of South African vehicles in the American market.
