U.S. President Donald Trump’s decision to impose a 30% tariff on South Africa’s exports starting August 1 could result in the loss of around 100,000 jobs, particularly affecting the agriculture and automotive sectors, warned South African central bank governor Lesetja Kganyago on Wednesday. The tariff is expected to have significant repercussions, particularly for industries like citrus fruit, table grapes, wine, and the automotive sector.
Kganyago explained that the tariff would deal a devastating blow to South Africa’s agricultural sector, which employs many low-skilled workers, particularly in citrus, grapes, and wines. The central bank governor expressed concerns about the impact on jobs, saying, “If we do not find alternative measures, the impact on jobs could be around 100,000.”
Statistics reveal that South African car exports to the U.S. have already plummeted by more than 80% after the Trump administration imposed import tariffs on cars in April. Kganyago noted that if the tariff is not addressed, it could lead to massive losses not just in agriculture, but also in the country’s broader economy, severely affecting jobs in transport, hospitality, offloading, warehousing, and retail sectors.
South Africa’s unemployment rate is already one of the highest in the world, with an official rate of 32.9% in the first quarter of this year, and an expanded rate of 43.1%. Farmer groups have raised alarms about the impact on various agricultural sectors, including citrus, macadamia nuts, grapes, wine, fruit juices, and ostrich leather. In the citrus sector alone, 35,000 jobs are at risk, particularly in towns like Citrusdal in the Western Cape, which rely heavily on exports to the U.S.
South African President Cyril Ramaphosa, in response to the tariffs, pushed back against the U.S.’s stance, arguing that the 30% reciprocal tariff is based on inaccurate trade data. Ramaphosa said in a statement that South Africa’s interpretation of its trade with the U.S. shows an average tariff of 7.6% on imports and that 77% of U.S. goods enter the country tariff-free. He reiterated that South Africa maintains the 30% tariff is not reflective of the trade data and that negotiations would continue. He expressed optimism that the tariff could be modified depending on the outcome of these talks, but emphasized the need for South African companies to diversify their markets.
Agriculture Minister John Steenhuisen acknowledged that while the U.S. initially sought “more ambition” in South Africa’s trade proposals, it remained uncertain whether the terms would be negotiable. He stressed the importance of identifying exactly what the U.S. wants and whether it aligns with South Africa’s capabilities.
South Africa has been trying to finalize a trade deal with the U.S. since May, following talks with President Trump during his White House meeting with Ramaphosa. South Africa has also presented proposals at a U.S.-Africa summit in Angola last month. The U.S. remains South Africa’s second-largest bilateral trading partner after China.
The new tariffs are likely to disrupt the exports of agricultural products like citrus fruits, nuts, wine, and other manufactured goods. Wine exporters are exploring price adjustments and redirection of stock, while Agri SA has warned that citrus farmers might lose significant market share to competitors such as Chile and Peru. The situation has further strained the prospects for producers of ostrich leather and other agricultural goods.
In response to the tariffs, South African companies are facing the daunting task of finding new markets for their products, but this will take time, according to industry groups. The financial strain caused by these tariffs could deepen the country’s economic challenges, as South Africa struggles to maintain its position in key export markets.
