Trump's Tariffs: Consequences for South African Agriculture

Even with a glimpse of hope, a troubling silence hangs. Neither the US government, where various exporters – including those in the citrus sector – have submitted trade propositions, nor the South African government indicate clearly whether a more favorable trade agreement can be established.

Industry groups in citrus fruits, wine, and table grapes told African Farming that the economic repercussions could be “devastating.”

Consequences for the Wine and Grape Industry

Christo Conradie, Manager for Stakeholder Engagement and Policy at South Africa Wine, noted that the increased import duty could deeply impact the sustainability of wine exports to the US, creating tensions throughout the entire value chain.

He underlines the significance of the US market for the South African wine industry – approximately 660 million Rand worth of wine is exported annually to the United States.

A 30% import tariff is expected to lead to a significant decline in export volumes as South African wines become less competitive in an already fiercely competitive landscape.

This loss will have extensive implications – from decreased revenues for producers and exporters to smaller operations and potential layoffs, particularly in rural areas where viticulture serves as a key source of employment.

The South African Table Grape Industry (SATI) expresses deep concern about the 30% import duties. The US is seen as a vital emerging market for South African table grapes, having established itself as a reliable supply source outside of the regular season over the past two decades.

The 30% tariff would render South African grapes uncompetitive in the US market. This situation could worsen if competitors from the Southern Hemisphere – like Peru and Chile – gain a competitive edge with lower tariffs.

SATI fears that the tariff could obstruct the sector’s efforts to expand US exports – a fundamental aspect of SATI's diversification strategy.

While only 3% of South Africa's table grapes currently reach the US, this volume has increased steadily at an average annual growth rate of 20% from the 2020/21 season to the 2024/25 season.

For the 2024/25 season, 2.2 million 4.5-kg cartons (roughly 9,900 tons) of table grapes valued at approximately 360 million Rand were exported to the US, with a gross production value in the previous year at 15 billion Rand.

Beyond the industry’s significant contribution to the local economy, it generates nearly 105,000 jobs valued at 3.83 billion Rand annually. The increased US import tariffs pose a threat to these jobs.

US Consumers Will Bear the Cost

A 30% tariff on South African table grapes would mean US consumers facing nearly double the average price – around $44 for an 8.2 kg box.

Alex Whyte from the Macadamias SA (SAMAC) market access and development committee believes that ultimately, US consumers will shoulder the costs of tariffs imposed by Trump.

Apart from China, the United States remains the largest market for South African macadamia nuts and shelled nuts. The nut sector has recently experienced mixed news.

While China announced in June that it will impose no new tariffs on macadamia imports from South Africa starting next year – an action expected to boost demand and enhance competitiveness – the US has announced additional tariffs.

The Government Is Not Concerned

The overwhelming silence after the South African government's visit to the US this past May suggests little progress has been made in negotiations between the two countries.

Terry Gale, Chairman of Exporters Western Cape (EWC), stated that exporters are particularly anxious about the current uncertainty in trade with the US.

The EWC still hopes that South African enterprises can collaborate and jointly submit a trade proposal that aligns with the requirements of President Trump to avert a crisis.

Gale indicated that members of his organization from the agricultural sector, particularly in the citrus industry, have voiced their concerns to the US without success thus far.

African Farming inquired with the Department of Trade, Industry, and Competition about the status of negotiations between South Africa and the US. Spokesperson Phumzile Kotane noted they would provide feedback as new information surfaces.

Citrus Industry

Thousands of jobs in the citrus sector are at stake. Entire towns in the Western and Northern Cape provinces, reliant on the US market, could face devastation before new markets are established.

Dr. Boitshoko Ntshabele, Managing Director of the Citrus Growers’ Association of Southern Africa (CGA), mentioned that about 7 million 15-kg cartons of citrus fruits worth 1.9 billion US dollars are exported to the US annually.

“The increased import tariffs will render our citrus products non-competitive in the US market and would be a devastating blow to small towns in the Western and Northern Cape, as these provinces export solely to the US.”

Exports to the United States provide approximately 35,000 local jobs. It is estimated that four to five people depend on the income of one job – which means the lives of about 140,000 to 175,000 individuals will be affected.

Ntshabele noted that redirecting citrus products is not straightforward, as they are cultivated according to specific market requirements – including particular plant protection provisions.

Even if producers find a way to reroute some products, it could lead to oversupply in other markets – causing prices to plummet. This would affect the entire South African citrus industry.

If the increased US import tariffs are confirmed, the CGA hopes that the government will take all steps available to enhance access to other markets.

There are various markets in Asia where local producers could potentially benefit. However, improved access to these markets requires trade agreements, lower tariffs, and adjusted plant protection protocols – which takes time, and time is of the essence right now.

The industry aims to increase its citrus production by 100,000 cartons in the coming years while actively pursuing new export markets.