AgriSA voices serious concern over the recent imposition of a 30% tariff by the United States on South African exports, effective August 1. This significant development highlights the urgent need for South Africa to adopt strategic responses to safeguard and diversify its markets its agricultural export markets amidst evolving global trade dynamics. While the US market, under AGOA, accounts for roughly 4% of South Africa’s total agricultural exports (approximately US$488 million in 2024), the impact on key commodities could be significant, with knock-on effects across the value chain.

Impact Overview

South Africa’s agriculture is heavily export-oriented, with exports worth US$13.7 billion in 2024. The primary commodities at risk include citrus, macadamia nuts, grapes, subtropical fruits, wine, fruit juices, ostrich leather, and other fresh produce. The sector’s dependence on the US market, where around 7 million cartons of citrus (about 100,000 tonnes) are exported annually, is vital for rural employment and economic stability.

“While calls for market diversification are valid, supply chains cannot be redirected overnight and will take time to materialise. This highlights the immediate severe impact on regions and producers who are heavily reliant on the US market, said Johan Kotze, Agri SA’s Chief Executive Officer.

Citrus Industry: Critical Timing and Risks

South Africa’s citrus season runs until October 2025, coinciding with the introduction of the new tariffs. The 30% tariff will elevate the cost of each citrus carton, risking a significant loss of market share to competitors like Chile and Peru.

Other Fruit

While citrus remains the immediate concern, other fruits such as subtropical fruits, table grapes, avocados, macadamia nuts, blueberries, and stone fruits will also be affected. In some value chains, such as macadamia nuts, significant hectares will be export-ready in the coming years. This emphasises the need for medium- to long-term strategic planning to safeguard these commodities.

Wine Industry: Facing Significant Risk

South Africa’s wine sector faces potentially disastrous impacts under the 30% tariff. The increase will eliminate profitability for many producers due to the high-cost increase across the supply chain. This could lead to significant job losses and threaten the livelihoods of rural communities dependent on viticulture and associated industries. Exploring new markets and strengthening existing ones will be critical, but shifting away from established export channels cannot be achieved in the short term.

Ostrich Leather, Feather Dusters & Pet Treats

South Africa’s ostrich leather exports, constituting 60% of US-bound shipments, could face increased costs, affecting key sectors like footwear. The impact may not only reduce US demand but also increase prices in the US market, potentially leading to decreased consumption.

Strategic Responses Needed

  1. Enhance Trade Agreements and Diplomacy: The immediate situation demands the need for greater commitment from the Department of Trade, Industry, and Competition (DTIC), which leads the effort to expand exports, the Department of Agriculture and the Department of International Relations and Cooperation (DIRCO). Urgent allocation of additional resources and alignment on a pragmatic trade strategy for agriculture are needed.
  2. Address Tariff and Non-Tariff Barriers: South Africa’s participation in global trade markets is significantly impeded by its trade agreements, or lack thereof, with key economic regions such as the ASEAN countries.

    “These agreements facilitate trade by reducing tariffs and fostering economic integration. However, South Africa faces significant competition from countries that have already established comprehensive trade agreements,” said Kotze

    Without the development of similar agreements, South African products could be more expensive, reducing their competitiveness. This is further compounded by the lack of Economic Integration Agreements (EIAs) in key markets. EIA’s allow deeper cooperation beyond tariffs, such as in regulations and standards, providing competitors with an edge in product acceptance and market integration. Additionally, South Africa needs to work on reducing tariff barriers, particularly the BRICS and ASEAN markets.

  3. Diversify Export MarketsOver the medium and long term, further diversification of export destinations can mitigate risks associated with geopolitical uncertainties. South Africa should explore expanding its presence in growing markets, including increased engagement with African nations, ASEAN and the BRICS countries.

Conclusion

This development is a wake-up call for South Africa’s trade policy and agricultural sector. AgriSA remains committed to working alongside government bodies, industry partners, and international alliances to navigate these challenging trade waters. Proactive and collaborative efforts will be key to preserving the viability and future growth of South Africa’s agricultural sector.

Enquiries
Johann Kotzé, AgriSA CEO
+27 79 523 5767
jfk@agrisa.co.za