South African exporters are feeling the weight of new US tariffs, with businesses warning of profit declines, fresh surveys showing weakening sentiment, and policymakers scrambling to maintain ties with one of the country’s top trading partners.
In August, the United States imposed a 30% tariff on South African exports, the steepest rate in Sub-Saharan Africa.
The move, first announced by President Donald Trump in April under his “Liberation Day” proclamation, has rattled confidence and threatens tens of thousands of jobs in industries ranging from agriculture to carmaking.
The United States accounts for nearly 7.5% of South Africa’s total exports, making it the country’s third-largest trading partner after the European Union and China, according to the Financial Times.
Yet South Africa makes up just 0.25% of all US imports, a discrepancy government officials argue makes the tariff “inscrutable” and unjustified.
Survey data is already showing the effect. The seasonally adjusted Absa Purchasing Managers’ Index (PMI) dropped to 49.5 in August from 50.8 in July, pushing the manufacturing sector back into contraction.
- – New sales orders fell sharply by 8.5 points to 47.4, with firms citing both tariffs and weaker demand.
- – The business activity index dropped to 45.8, reflecting pressure from cheaper imports.
- – Even supplier delivery times improved, but only because orders had fallen rather than because of better logistics.
Economists warn the tariff could shave 0.2 percentage points off South Africa’s GDP growth this year, depending on how well the country can redirect trade flows.
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Corporate warnings are mounting. Bell Equipment, a JSE-listed manufacturer, told shareholders that earnings for the first half of 2025 are expected to fall between 22% and 32%, down to as little as 220 cents per share compared with 322 cents last year.
The company said the “expected decrease in earnings is primarily due to a global slowdown in demand and the impact of the USA tariff situation,” adding that while the first-half effect was limited, the second half will be “more significant.”
Other export-driven industries, including mining and autos, are also bracing for damage.
Carmakers such as BMW and Ford SA, which assemble locally for the US market, caution that the 30% tariff could destroy competitiveness overnight.
Wine and fruit producers, who rely on counter-seasonal exports to the US, also face potential losses.
The South African government has pushed back, insisting its exports support, rather than compete with, American industry.
Officials stress that agricultural shipments fill supply gaps during off-seasons in the US, while mineral and manufacturing exports serve as vital inputs for American production.
They also note that more than 600 US companies operating in South Africa contribute to local industry and jobs.
“South Africa is not just a trading partner, we are a major investor in the United States, with our companies sustaining American jobs,” the Department of Trade and Industry said.
“Our goal is to preserve and grow these mutually beneficial relationships.”
Despite the pressure, 35% of South African exports remain exempt from the tariff, including copper, pharmaceuticals, semiconductors, stainless steel scrap, and certain energy products.
Still, analysts warn the true test will come in the second half of 2025, when the full impact on corporate earnings and employment becomes clear.
With Transnet’s ongoing logistics bottlenecks already weighing on mining and manufacturing exports, the tariff shock could further deepen South Africa’s economic troubles.
For now, Pretoria is leaving room for diplomacy. “We will continue to engage the US with a view to conclude a deal that advances the interests of both countries,” the trade department said.
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Image Credit: Business Insider Africa
