South African SMEs show resilience with 23% rise in US exports after turbulent September

In a show of resilience, South African small and medium-sized enterprises (SMEs) that export to the United States have reported a 23% improvement in direct-to-consumer (D2C) exports for October, following a staggering 52% drop the previous month.

This data, unveiled by the SME Export Index, published by the South African international shipping platform TUNL, highlights the ongoing challenges that local businesses face amid the impact of US tariffs announced earlier this year.

The upward shift in exports, while promising, still places figures 40% below the baseline set on 1 April, when former President Trump imposed new tariffs that adversely affected South African exports.

The SME Export Index, which examines real shipping volumes from a consistent group of 1,850 exporters, offers critical insights into how these economic policies influence small businesses operating on a global scale.

Craig Lowman, CEO and co-founder of TUNL, points out that the consequences of US policy decisions continue to impact small-parcel exports significantly.

“The sustained drop reflects the ongoing impact of US policy decisions which have made small-parcel exports directly to consumers far less economical,” Lowman explained. He also noted that waning US consumer demand, coupled with rising confusion surrounding duties and product classifications, has compounded issues for South African retailers navigating this landscape.

As specific sectors bear the brunt of these tariffs, South African apparel exports, for instance, have plummeted by 78% since April, while the Cosmetics and Skincare categories have seen an alarming 80% decline due to increased input costs and shrinking consumer interest in the United States.

Conversely, other sectors such as Books & Education and Art have demonstrated stability, benefiting from exemptions on certain tariffs.

These fluctuations are crucial for South Africa’s economy: each percentage point of export change translates to thousands of jobs lost or gained across manufacturing, logistics, and support services sectors.

According to TUNL COO Aretha Cooper, the outlook for the current quarter raises concerns, as the smaller rebound in October signifies softer recovery dynamics in global trade activity.

“We’ve seen global exports dip around September in previous years, which isn’t unusual,” Cooper commented. “However, this year’s subdued recovery shows that the landscape is markedly different.”

To adapt to the new norm, local SMEs have shown significant innovation.

Many exporters used September as a period of recalibration, adjusting their strategies in response to the tariffs and shifting consumer expectations.

Some opted to divert their focus to markets where consumers are more accustomed to duties, while others have proactively incorporated tariff information into their checkout processes to alleviate surprises for US consumers.

Lowman emphasises the necessity of diversification for South African brands wishing to grow internationally.

“Our merchants are learning to reach new markets and build resilience, showcasing the innovative spirit of local SMEs,” he said. Despite the agility that smaller exporters possess, they remain vulnerable to continuous policy changes and fluctuations in market conditions.

Looking ahead, the fourth quarter of 2025 could be decisive for SMEs, as the holiday shopping period coincides with ongoing trade policy uncertainty.

Lowman advises exporters to brace for continued volatility while actively exploring alternative markets to mitigate their risks.

BUSINESS REPORT