South Africa was not spared the “Liberation Day” tariffs announced by US President Donald Trump against countries around the world. Pretoria will now face tariffs of between 10% and 30% in the US for all products.
In this environment, it is prudent to assume that South Africa will be out of the African Growth and Opportunity Act (Agoa), which afforded us duty-free access to the US for a range of products, including the auto industry and agriculture.
We suspect there may be some differences product by product, but that should be clear as soon as the US authorities release more information. The exact levy will be based on what the White House council of economic advisers thinks is the sum of tariffs and non-tariff barriers on US goods to a specific country.
South Africa is arguably among countries with the lowest tariffs, which some local stakeholders have previously argued was a policy mistake at the onset of South Africa rejoining the global economy after 1994.
The details of how domestic industries engage with this will also become clearer in the coming days and weeks. The US accounted for 4% of the total $13.7bn (R261bn) in agricultural exports from South Africa in 2024. While this may seem small, it is significant for specific industries, particularly citrus, grapes, wine and fruit juices. Since the inception of Agoa, South Africa's share of agricultural exports to the US has remained at similar levels.
With a 30% tariff now, while South African agricultural competitors such as Brazil, Chile, and Australia will face only a 10% tariff, we will surely face a competitiveness problem in the US market.
Diverting products to alternative friendly markets will not be easy and will take time. But this should be the main preoccupation of the department of agriculture, assisted by the department of trade, industry and competition. The Middle East and Asia should be the primary focus for South Africa to build access, mainly China, India and Saudi Arabia.
The Middle East promises more potential for expansion, as it is not as saturated as the EU, and there are no domestic competing farmer interests. While a significant share of South Africa's agricultural products are already exported to the Middle East, their presence is arguably still peripheral. For example, according to Trade Map data, Saudi Arabia imports roughly $25bn of agricultural products annually. South Africa accounts for a mere 1% of the Saudi Arabian imports, and ranks 31st in the agricultural imports list.
The UAE is a large agricultural market that imports roughly $22bn of agricultural products annually. South Africa has a 2% share and is the 16th-largest supplier. Qatar imports about $4bn of agricultural products a year. But here, South Africa also plays a minor role, ranking 10th in the list of suppliers and having a 2% market share.
The countries that occupy a larger market share in these Middle Eastern countries are India, Brazil, Australia, the US, Canada, New Zealand, the UK, Denmark, Netherlands, Italy, Spain, Argentina, Russia, France and Turkey. The Middle East primarily imports meat products, grains, oilseeds and fruit.
Given this peripheral participation and the possibility of increasing South Africa's agricultural production in the coming years, there remains room for greater involvement in the Middle East market. There is a need for targeted promotion and marketing of products, along with government support, to nudge the Middle Eastern countries to address any remaining phytosanitary barriers and tariffs for South African products.
The case for pushing more agricultural exports to China is clear. In 2023, China was a leading agricultural importer, accounting for 11% of global agricultural imports, which totalled over $200bn. The US, Germany, the Netherlands, the UK, France and Japan trailed China.
The leading suppliers of agricultural products to China are Brazil, the US, Thailand, Australia, New Zealand, Indonesia, Canada, Vietnam, France, Russia, Argentina, Chile, Ukraine, the Netherlands and Malaysia.
South Africa is the only African country in China's top 30 agricultural suppliers, ranked 28 in 2023. It remains a negligible player, accounting for a mere 0.4% ($979m) of China's agricultural imports of $218bn in 2023.
China is already one of South Africa's major agricultural markets for fruit, wine, red meat, nuts, maize, soybeans and wool. However, there is room for more ambitious export efforts.
What South Africa should argue for in China is a need for lower import tariffs and the removal of phytosanitary constraints on various products. This would unlock the export potential.
A diversification approach for South Africa's agriculture is urgent. Beyond the US tariffs, we will have a boom in harvesting various fruits in the coming years, which will require a market.
* Sihlobo is an agricultural economist
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