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South Africa’s economic growth trajectory is expected to escape the latest round of US tariffs relatively unscathed, with businesses having weathered a far harsher 30% tariff shock last year.But the announcement last week of a sweeping 12.5% tariff shows that the US administration is committed to its protectionist policy agenda, escalating calls for South African traders to diversify away from America.“While US-SA economic relations obviously remain significant for both countries, it is plain that South Africa must now continue to pursue assertive trade and supply chain diversification strategies,” North-West University Prof Raymond Parsons told Business Day.On Friday, President Donald Trump announced plans to impose tariffs on products from 60 economies, including South Africa, claiming that these countries violate US import regulations.South Africa and 40 other of these economies are accused of imposing and effectively enforcing forced-labour practices in the production of exported goods, warranting a 12.5% tariff.The other 19 target economies have apparently failed to impose laws that prohibit imports of goods produced using forced labour and will face a 10% tariff.The department of trade, industry & competition tried in vain to get the tariff removed during diplomatic engagements earlier this month, pointing out that South Africa already has legislation prohibiting forced labour and goods imported under such conditions.It was the latest attempt by Trump to justify his aggressive trade policy agenda after the US Supreme Court struck down his 2025 “Liberation Day” tariffs earlier this year.While they are a blow to South Africa’s economy and its relationship with the US, many of the country’s exports are exempt from the latest tariffs. All products already subjected to section 232 tariffs, including cars, car components, steel and aluminium, are exempt, as are large swathes of South Africa’s agricultural and mining products and all pharmaceutical exports.Oranges, limes, tea, macadamia nuts, spices, seeds, cane sugar, chemicals, isotopes and civil aircraft are shielded from the policy, as are critical minerals, precious metals and platinum group metals (PGM).Still, the latest round of tariffs shows that it “remains prudent and necessary for South Africa to gradually pivot away from the uncertain and volatile US tariff walls”, said Parsons.South Africa’s options include expanding intra-African trade through an expedited African continental free trade agreement, deepening EU and Asian economic partnerships, and optimising Brics.“Accelerating market diversification is now the name of the game,” said Parsons.One of the sectors most threatened by Trump’s tariffs is farming, where the US accounted for around 4% of exports last year. However, Agbiz chief economist Wandile Sihlobo said the sector is still expected to report growth this year, even when accounting for the 12.5% tariff.Accelerating market diversification is now the name of the game.— Prof Raymond Parsons “The new 12.5% tariff is not desirable, but it is still much better and more aligned with some of our competitors,” said Sihlobo.“Importantly, the US has raised the tariffs for a range of countries, including some of South Africa’s agricultural competitors, such as Australia, Peru and Chile, who are also at these levels.“We believe that in 2026, we may see better agricultural export activity as tariffs are far lower than the 30% we faced in much of 2025.”Commenting on the latest round of tariffs, the department of trade, industry & competition said that it would be requesting public comments on the intent to issue a regulation to prohibit goods produced using forced labour and child labour.It said the government would “continue to engage with the [US trade representative] on the section 301 tariffs with a view to either eliminate or reduce the current tariff imposed on our country.”
