Business

SA Exports Under Fire: What Trump’s New Tariffs Could Mean for Jobs, Trade and the Future of AGOA

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2 months ago

July 9, 2025

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As new US tariffs loom, South Africa’s export-driven industries and the thousands of jobs they support, may be heading for rough waters.

When Dawie Roodt speaks, the markets tend to listen. So when the Efficient Group’s chief economist warned that new US tariffs would “kill economic growth” and accelerate the “de-industrialisation” of South Africa, it wasn’t alarmist, it was soberingly realistic.

From August 1, the United States is set to impose a steep 30% tariff on South African exports, targeting a wide range of goods from cars and metals to agriculture. At stake? Billions in trade, thousands of jobs, and South Africa’s already-shaky position in the Africa Growth and Opportunity Act (AGOA), the preferential US trade deal designed to support sub-Saharan African economies.

AGOA on Life Support

Let’s not sugar-coat it: AGOA is on the ropes, and these tariffs could be the knockout punch. Roodt didn’t mince words: “We need to accept that AGOA is dead.” While technically South Africa hasn’t been kicked out of AGOA, the imposition of new tariffs is fundamentally at odds with the duty-free access AGOA promises.

Complicating matters further is South Africa’s controversial Land Expropriation Act, which clashes with AGOA’s requirement for strong property rights. The US, it seems, has decided enough is enough. Add to this political pressure surrounding South Africa’s stances on Israel, Iran, and Black Economic Empowerment (BEE), and it’s clear these tariffs aren’t just economic, they’re deeply political.

Targeting South Africa’s Economic Backbone

The US is South Africa’s second-largest export market after China, with more than R157 billion worth of goods shipped in 2024 alone. That includes over 25,000 vehicles—many of them from local plants operated by giants like BMW, Ford, Isuzu, and Toyota. In total, vehicle exports to the US were worth R35 billion last year.

Industry groups like Naamsa (the National Association of Automobile Manufacturers of South Africa) are already ringing the alarm bells. CEO Mike Mabasa confirmed that meetings with manufacturers are underway, and the consensus is grim: the costs of these tariffs can’t be absorbed. That means US consumers will pay more, and SA-made vehicles may lose their competitive edge.

And it’s not just factories feeling the heat. Downstream, the National Automobile Dealers’ Association (Nada) warns that the fallout could creep into local dealerships too, via reduced consumer demand, tighter margins, and delayed interest rate cuts due to economic uncertainty.

Public Reaction: Quiet for Now, But Don’t Be Fooled

So far, public reaction has been surprisingly muted. The rand has even shown slight strength against the dollar, likely driven by hopes of last-minute diplomacy. But history tells a different story—tariffs like these eventually hike prices, kill trade, and hurt the most vulnerable workers.

Social media chatter is growing, with some users questioning whether the government is prioritising ideology over economic survival. One X user put it bluntly: “We’re about to lose AGOA over foreign policy stunts. Do they even care about workers on the line?”

A Window of Opportunity or a Dead End?

Minister of Trade and Industry Parks Tau remains hopeful. He’s said there’s still “room for engagement” with the US. Roodt agrees, at least in theory. Trump, he says, is known for keeping the door open, but he’s also a transactional leader. If South Africa wants the tariffs lifted, it’ll have to offer something in return. And it might not like the price.

Looking East and Inward

Diversification is now more than a buzzword, it’s survival strategy. FedEx Sub-Saharan MD Gregory Saffy sees potential in the African Continental Free Trade Area (AfCFTA), which allows duty-free trade across the continent. Since joining in January 2024, South Africa has already exported over R820 million in goods through AfCFTA, including mining gear, electronics, and food products.

But AfCFTA isn’t an overnight fix. South Africa faces stiff competition from other countries also fleeing US dependency. To compete, we’ll need efficiency, strong infrastructure, and critically, policy certainty.

Professor Raymond Parsons from NWU Business School puts it best: “South Africa is not without remedies. But we must act fast. Growth-friendly policies and global competitiveness are non-negotiables now.”

This isn’t just about exports, it’s about what kind of economy South Africa wants to be. Manufacturing and agriculture are two of the country’s few remaining job-rich sectors. Undermining them means undermining any real shot at inclusive growth.

If these tariffs stick and if AGOA is truly dead—South Africa will need to find new trade allies, reduce the cost of doing business, and focus relentlessly on unlocking domestic value chains.

Because if we don’t, it won’t just be exports we lose. It’ll be the future we’ve been trying to build.

US tariffs are more than a diplomatic slap, they’re a potential body blow to South Africa’s economy. Jobs, growth, and the country’s place in global trade all hang in the balance. Whether government and industry can pivot in time may determine how deep this damage runs.