South Africa is staring at a potential economic setback as new United States tariffs could see exports to the US fall by as much as $2.3 billion annually. This is according to fresh econometric modelling by trade and tax experts, following President Donald Trump’s warning of reciprocal tariffs on goods from countries seen to be supporting “anti-American policies of BRICS,” which includes South Africa.
The proposed tariffs include a 30% duty on all non-exempted goods, 25% on automobiles and auto parts, and a steep 50% on steel, aluminium, and copper. Analysts warn that if these tariffs take effect as scheduled on August 1, 2025, they could severely hurt South Africa’s trade with its second-largest export market outside of Africa.
In 2024, South Africa exported goods valued at $14.9 billion to the US, accounting for about 8% (R157 billion) of the country’s total exports of R1.8 trillion. While some minerals and critical metals may remain exempt from the tariff hike, about 80% of the 2,500 different product lines currently shipped to the US would be hit hard if the duties are imposed.
Duane Newman, a tax partner at EY, said modelling by his firm estimated a possible decline of $1.4 billion to $1.6 billion in exports per year based on 2024 values. But a more concerning projection came from Professor Lawrence Edwards of the University of Cape Town’s School of Economics, who placed the potential loss at $2.3 billion per year, especially when comparing South Africa’s tariff exposure to those of its competitors.
“Our real concern here is not just the tariff rate but how it compares to what our competitors are paying,” Prof. Edwards explained during a webinar hosted by XA Global Trader Advisers. “If they’re paying less, then our goods become more expensive, and buyers will simply go elsewhere.”
Donald MacKay, CEO of XA Global Trader Advisers, said that while the US market represented a meaningful portion of South African exports, South Africa only contributed 0.44% to America’s yearly imports, meaning the economic impact would be more significant for South Africa than for the US.
One of the most affected sectors is the automotive industry, which already faces a 25% tariff under Section 232 of the US Trade Act. The additional 30% or potential 40% tariff would make it almost impossible for South African car manufacturers to remain competitive in the US market unless a similar deal to the one negotiated by the UK is reached. Under that deal, the first 100,000 UK-made cars shipped to America each year enter under a reduced 10% tariff.
Newman added that this moment could be an opportunity for South Africa to rethink its trade strategy. He urged local firms to prepare for a future defined by rising protectionism and tougher customs environments. “Businesses must go back to the basics—reviewing vendor and intercompany contracts, checking product classifications, and reassessing rules of origin,” he said.
The agricultural sector is also at risk. Citrus fruits, wine, and meat products like poultry, beef, and pork could face stiffer competition if countries like Chile and Peru secure better tariff terms with the US. South Africa’s relative lack of concessions on these agricultural issues has remained a point of contention in trade talks with Washington.
Professor Edwards encouraged the South African government to intensify its diplomatic engagements ahead of the proposed August 1 deadline. Trump’s letter to President Cyril Ramaphosa left room for adjustments, hinting that the US might reconsider the tariffs if specific concerns are addressed.
“There’s still a narrow window to act,” Edwards said. “South Africa can show goodwill by addressing long-standing trade irritants—especially around poultry and pork market access—and offer the US what we’ve given the EU and UK in recent trade deals.”
Despite the gloom, analysts say all hope is not lost. By seeking temporary relief or special quotas, South Africa could shield key industries while adjusting to the new trade reality. But the broader message is clear: countries must prepare for a more protectionist global environment, where tariff walls are rising and strategic alliances are more crucial than ever.
