US tariffs jolt South African exports; spark calls for supply chain transformation

The US’ decision to impose a sweeping 30% tariff on all South African imports from August has sparked sharp concern from economists, supply chain experts and government alike, with warnings that the move could significantly impact the country’s growth outlook and force a strategic rethink of export and manufacturing priorities.

President Cyril Ramaphosa acknowledged this issue when responding to US President Donald Trump’s letter imposing the tariffs, urging South African companies and negotiators to accelerate diversification efforts and build greater economic resilience.

While diplomatic negotiations continue, local and international experts warn that the consequences for South African exporters could be immediate and profound.

Trump has since, again, extended the deadline although countries that have received the letters, such as South Africa, do not have an additional grace period. While

Aiste Bijuna, Consultant for Economies and Consumers at Euromonitor International, says the tariffs will deliver “significant economic and industrial implications”.

“With exports accounting for 27.8% of GDP in 2024, South Africa’s economy remains heavily reliant on external demand,” she says. While trade is geographically diversified, the US still accounts for 7.7% of outbound trade, making this a meaningful headwind," Bijuna says.

Bijuna added "key sectors such as automotive, precious metals and minerals, and food are particularly exposed,” she adds. “The tariffs will likely reduce US consumer demand for South African goods, dampening export volumes and weighing on investor sentiment.”

Dr Ernst Van Biljon, head lecturer and programme coordinator for the M Com in Supply Chain Management at the IMM Graduate School, agrees, saying the tariff move is not just a trade dispute, but a fundamental shift in the way geopolitics is reshaping supply chains.

“Supply chains in the US will face pressure to absorb costs, pass them to consumers, or seek alternative sourcing,” says Van Biljon.

This could accelerate the trend toward “friend-shoring” or “near-shoring” where the US imports from politically aligned or geographically close countries to reduce risk and improve logistical efficiency, says Van Biljon.

“The tariffs could trigger a global re-routing of goods. South African products previously destined for the US might now seek new markets, potentially increasing supply in other regions and creating new competitive dynamics,” Van Biljon says.

South African producers in exposed sectors such as citrus, wine, nuts, and auto components need to “urgently identify and cultivate new international markets beyond the US,” says Van Biljon.

Bijuna suggests manufacturers should target alternative export destinations where trade agreements already exist, including the EU, UK, Latin America and within Africa, while boosting domestic demand and operational efficiency to sustain revenue and profitability.

Van Biljon says companies must go beyond seeking new markets and reimagine their value chains entirely. This means investing in regional value chain integration and leveraging relationships in the Southern African Development Community, BRICS and the African Continental Free Trade Area frameworks, and accelerating partial local beneficiation to improve resilience.

Some manufacturers might consider shifting production to the US to retain market access, says Bijuna. However, this would be disadvantageous for the local economy. Van Biljon agrees that moving manufacturing to the US would come at the cost of jobs, suggesting rather that the country emphasises “Buy Local”.

“The true opportunity is not in survival but in transformation — future-proofing South Africa’s role in global supply chains through strategy, value creation and new market development, says Van Biljon.

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