South Africa’s agricultural sector is bracing for significant challenges following the announcement of a 30% tariff on imports by US President Donald Trump. Agriculture Minister John Steenhuisen expressed deep concern over the impact on the country’s exports during his budget speech in Parliament on Tuesday, highlighting the potential loss of duty-free access under the African Growth and Opportunity Act (AGOA).
The AGOA, which has facilitated tariff-free exports of over 6,000 South African products to the US since 2000, is now at risk of termination. Steenhuisen warned that the tariff, set to take effect on 1 August, could severely affect key agricultural exports, including citrus, wine, nuts, and table grapes. “The agriculture sector is particularly exposed,” he stated, underscoring the urgency of addressing the issue.
Despite the looming deadline, Steenhuisen remains optimistic about negotiating a more favourable trade agreement with the US. He emphasized the need for collaboration with Trade, Industry, and Competition Minister Parks Tau to mitigate the tariff’s impact. “There’s still time for the government to negotiate a deal to ensure our economy meets the requirements of our trading partners,” he said.
The tariff hike, described by Trump as a move to address trade imbalances, could reduce South Africa’s export competitiveness, particularly against countries like Brazil and Chile, which face lower tariffs. In 2024, the US accounted for 4% of South Africa’s $13.7 billion agricultural exports, a modest but significant share for specific industries. The loss of AGOA benefits could lead to job losses and reduced foreign exchange earnings, especially in regions reliant on citrus and wine production.
Steenhuisen also called for domestic reforms to bolster South Africa’s trade resilience. He highlighted efforts to diversify export markets, targeting regions such as Asia, the Middle East, and other parts of Africa, to reduce reliance on the US. The government is actively exploring opportunities under the African Continental Free Trade Area (AfCFTA) and existing agreements with the European Union and Japan.
As South Africa navigates this economic challenge, the focus remains on securing a bilateral trade deal with the US and strengthening global trade partnerships to safeguard its agricultural sector.
