CAPE TOWN – South Africa is scrambling to negotiate a new trade deal with the United States after President Donald Trump announced punishing 30% tariffs on exports, threatening to destroy thousands of jobs across the country.
The shock announcement, delivered in a letter to President Cyril Ramaphosa on Monday, will see the new tariffs kick in from 1 August – hitting among others the vital citrus industry particularly hard.
Rural communities to bear the brunt
The Citrus Growers’ Association warned that 35 000 jobs could be lost in the citrus sector alone, with small farming communities in rural areas facing the worst impact.
“These are communities that are already vulnerable to economic shocks,” said association CEO Boitshoko Ntshabele. “If we lose access to the US market, we’ll flood other markets, creating oversupply and potentially collapsing prices.”
South Africa is the world’s second-largest citrus exporter after Spain, making the industry crucial to the agricultural economy.
Fighting back with diplomacy
President Ramaphosa hit back at Trump’s justification for the tariffs, calling it a “contested interpretation” of trade figures between the two countries.
“South Africa will continue with its diplomatic efforts towards a more balanced and mutually beneficial trade relationship with the United States,” Ramaphosa said in a statement released Tuesday.
The presidency argues that South African data shows US exports to SA face an average duty of just 7.6%, with 77% of American goods entering South Africa tariff-free.
Car industry already feeling the pain
The automotive sector is already reeling from separate 25% tariffs imposed in April. Vehicle exports plummeted by more than 12% in June compared to the same period last year, with Mercedes-Benz’s C-class model exports to the US particularly affected.
The German carmaker has temporarily shut down production at one of its Eastern Cape plants for “volume adjustments” – a move the company says is partly due to assessing the impact of US tariffs.
Wine industry also under threat
The South African wine industry also faces a crisis with these heavy Trump tariffs. Industry leaders warn this decision threatens a vital export channel worth more than R650 million annually.
“This is a major blow,” said South Africa Wines (SA Wine), in a letter to their members.
The timing couldn’t be worse for an industry already under pressure. “Wine, as a discretionary and price-sensitive product, is particularly exposed,” SA Wine noted. “The industry is already dealing with uncertainty and tough cost pressures including inflation, logistics, and rising excise duties. This tariff adds yet another burden.”
The 30% increase would likely place South African wines at a significant price disadvantage, potentially pushing many labels beyond key psychological price points for American consumers who have numerous alternatives available.
A key worry is how this tariff affects South Africa’s position relative to competitors. “The tariffs imposed on our main competitors is still an unknown factor, but if these are significantly lower then South Africa will lose huge competitive advantage,” SA Wine warned.
Industry response
Despite the challenge, the wine sector is adapting quickly. “Our industry will push forward with our export diversification strategy, strengthening relationships in other key global markets, sharpening local marketing, and improving supply chain efficiency,” the statement explained.
Immediate responses are underway: “Exporters and brand owners are already looking at how to absorb some of the costs, adapt price points, or redirect stock. None of these are easy choices, but they’re necessary.”
Government action needed
SA Wine has called for urgent government intervention: “We call on the Department of Trade, Industry and Competition (DTIC) and DIRCO to continue their engagement with the US but with urgency. It’s crucial that we understand the full picture behind this decision, and explore every avenue for reversal or exemption.”
“Over the past 30 years, South African wine has earned a strong and respected presence in the US. We offer a unique story of terroir, resilience, sustainability, and diversity,” SA Wine emphasised. “This abrupt move threatens that progress, and the thousands of jobs tied to it.”
What’s at stake
The United States is South Africa’s second-largest trading partner after China, buying agricultural products, precious metals, and vehicles. The relationship has been governed partly by the African Growth and Opportunity Act (AGOA), which allowed certain South African goods to enter the US duty-free.
President Ramaphosa has urged local companies to start diversifying their markets and reduce dependence on US trade, signalling that the government expects a prolonged trade dispute.
The new tariffs come as South Africa’s economy continues to struggle with high unemployment and slow growth, making the potential job losses even more devastating for affected communities.
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