SA hit harder by US tariffs than rivals, amplifying export blow

South Africa risks a multiplier effect on export volumes to the US, given that the recently imposed 30% tariff is higher than that of rival exporters, making local products less competitive in the American market.

Lawrence Edwards, professor at the University of Cape Town’s School of Economics, has warned that the most serious threat posed by new US tariffs on South African exports lies not just in their size, but in how they stack up against duties imposed on competitors.

Earlier this week on Monday, US President Donald Trump announced tariffs of 30% on South African goods with the exception of precious metals.

According to UCT’s analysis, the 30% reciprocal tariff places South Africa at the upper end of affected countries when compared with its competitors. “This could lead to US consumers buying competitors’ products, which amplifies the negative effects of the tariffs in South Africa,” Edwards said. He estimates that the duties could affect around R2.3 billion in local exports.

Aiste Bijune, consultant for Economies and Consumers at Euromonitor International, has said that the tariffs “will raise the cost of South African goods in the US, likely dampening US consumer demand on imports and reducing their export volumes”.

Donald MacKay, CEO of XA Global Trade Advisors, said tariffs already in place – and those expected – affect about 1.3% of South Africa’s gross domestic product (GDP). “That doesn't mean it's going to move the GDP down by 1.3%, but that is the portion of our GDP that has the potential to shift,” he explained during a webinar on Friday.

Euromonitor International’s Trump Total Agenda scenario indicates that, in the event of a 30% US import tariff, real GDP growth could drop to 1% next year, down from a baseline forecast of 1.4%.

Bijune noted in a recent statement that, while South Africa’s exports are geographically diversified across Africa, Europe, Asia, and the Americas, the US still accounts for 7.7% of outbound trade, making the tariff hike a “meaningful headwind”.

“So, the US is important in our lives,” MacKay said. He noted that South Africa’s exports to the US account for about 0.44% of what that country imports.

MacKay said that there are also already National Security duties, such as a 50% tariff on steel and aluminium, which could be expanded to include copper from August. “Then we have 25% tariff already in place on cars,” he said.

According to Duane Newman, EY South Africa partner, the tariffs are likely to affect a small number of companies due to the concentration of impacted sectors. Bijune said key sectors such as automotive, precious metals and minerals, and food are particularly exposed.

Old Mutual chief economist Johann Els said he expects market forces to ultimately push back against protectionism. “In time, I believe US consumers (and voters) will drive a return to openness through their collective demand for more affordable goods, reminding policymakers that protectionism is unsustainable.”

Els cited McKinsey’s Productive Rebound scenario, which predicts tariffs peaking in 2025, followed by a new wave of diplomacy and resilient, reconfigured supply chains. “By 2027, trade as a share of global GDP is expected to rise again, powered by digital platforms and regional diversification,” he added.

President Cyril Ramaphosa has also questioned the rationale for the tariffs based on trade balances. “South Africa maintains that the 30% reciprocal tariff is not an accurate representation of available trade data,” he said.

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