Trade unions express concern over Trump's proposed tariff on South African exports

Workers unions in South Africa have raised concern about the impact of US President Donald Trump's announcement of 30% tariff coming into effect on 1 August.

The Federation of Unions of South Africa (Fedusa) said while it did not subscribe to alarmist projections of a 'jobs bloodbath,' it was mindful that the implications for South Africa’s export-led industries, particularly the automotive sector, could be profound if such measures were implemented.

Fedusa added it was particularly attuned to the concerns raised by its affiliate, the Motor Industry Staff Association (MISA), whose members were deeply embedded in a sector that has long relied on stable and rules-based access to US markets through the African Growth and Opportunity Act (Agoa).

“The proposed tariff would render South African automotive and manufactured goods significantly more expensive and less competitive in a vital export market. A contraction in demand would almost certainly force firms to scale down production, with downstream effects that include shift reductions, deferred investments, and potential job losses over time,” Fedusa said.

“This development must be viewed within the broader context of our economic vulnerabilities. South Africa’s growth remains fragile, and any disruption to trade flows with the United States will have a ripple effect across sectors and communities already burdened by high unemployment and inequality.” 

Fedusa thus called for urgent and high-level engagement between the government and US stakeholders to safeguard the Agoa benefits and to preserve the integrity of bilateral trade framework.

“While the political landscape in the United States remains fluid, we must act proactively to reinforce the value that South African goods bring to American industries and consumers, particularly in terms of cost efficiency, quality, and the contribution to regional stability,” it said.

The South African Federation of Trade Unions (Saftu) called Trump's tariff a “reckless proposal dressed in the language of America First”, adding that it has ignited a global trade war which began with reciprocal tariffs by China and Canada.

“Should Trump’s proposed tariffs come into effect on the 1st of August, the consequences for the South African working-class people will be severe,” Saftu said.

“They will cripple South African export industries, many of which are already reeling from internal crises such as load shedding and electricity grid collapse, dysfunctional ports and rail logistics. Water and sanitation failures in industrial areas, currency volatility, inflation, and depressed consumer demand.”

Saftu the most vulnerable sectors included steel and aluminium, which are capital-intensive and export-driven; agriculture and agro-processing, including citrus, wine, and nuts; clothing, textiles and footwear where competition is already intense and margins are thin; and automotive components and vehicles, which rely heavily on global value chains and US markets.

Meanwhile, Cosatu parliamentary coordinator Matthew Parks said the tariff may have a devastating impact on an economy that has been languishing at 1% growth since 2008 with a dangerously high unemployment rate of 43.1%.

“Sectors most at risk include the automotive and other manufacturing industries, agriculture, clothing, chemicals and jewellery. Depressingly, the pending tariff hike comes in the wake of the Eastern Cape facing 900 jobs on the line at Goodyear SA and more with Mercedes Benz 'temporarily' shutting down its vehicle production,” Parks said.

“We hope the US Congress will simultaneously renew the Agoa before the end of September as its tariff-free regime for 35 Sub-Saharan countries, including South Africa’s exports to the US, has helped nurture key growth sectors and facilitate regional integration across the African continent.”

BUSINESS REPORT