The Impact of President Donald Trump’s Tariffs on South Africa
The U.S.-South Africa trade relations were hit with a major blow in April 2025 when President Donald Trump imposed a broad 31% “reciprocal” tariff on South African imports.
While by now this would be “old news”, the effects and impact reverberate across multiple sectors in South Africa and are being acutely experienced in the logistics sector.
As the world watches on and many analysts forecast the fallout, the burning question in the logistics industry would be what could we “look forward” to?
From a South African perspective, the impact of this trade war goes far beyond the boardroom or political arena, and the true casualties of this war are far beyond the reach of journalists.
Economic Fallout
The imposition of these tariffs has led to a substantial downgrade in South Africa’s economic growth forecast. Economists surveyed by Reuters have reduced their 2025 GDP growth projection by 0.3 percentage points to 1.2%, the largest monthly downgrade since early 2023. In addition, further difficulties may arise for industries that directly benefit from duty-free entry under the African Growth and Opportunity Act (‘AGOA’).
Additionally, the taxes might cause the South African rand to weaken by 10% to 15%, which would raise inflation and increase the cost of imported goods for consumers in South Africa, resulting from a weaker rand. However, recent exchange rates have also demonstrated market volatility, which can be coupled with and ascribed to broader international geopolitical influences.
At the time of writing this article (30 May 2025), the South African Rand has gained ground on the U.S. Dollar since 01 April 2025, but has lost ground to the British Pound and Euro over the same period.
Sector-Specific Impacts
Narrowly focusing on specific economic sectors that may be affected as a consequence of the imposition of tariffs, certain sectors may be in the direct firing line, including the automotive, agricultural, and mining sectors.
- Automotive Industry: With shipments of over R27 billion in 2023, the United States ranks as South Africa’s third-largest market for automobile exports, according to BusinessLive. As this market remains under threat, it is foreseeable that the threat may translate into significant job losses. Industry leaders caution that if AGOA advantages are removed, the automotive sector may suffer catastrophic repercussions.
- Agriculture: Citrus exports from South Africa to the United States, which presently have duty-free access thanks to AGOA, are in jeopardy. If this advantage is lost, there may be significant job losses in rural areas and a drop in export earnings of more than one billion rand.
- Mining Sector: South Africa currently exports significant amounts of minerals, including palladium and platinum, to the United States. These minerals are essential for American catalytic converters. However, the fact that some minerals were spared from the tariff increases raises concerns about how equitable the trade policies were.
Logistics Sector Impact
President Donald Trump’s new tariffs and the reaction by world economies have resulted in an increase in shipping costs, while all modes (air and sea) are impacted, the most profound impact has been on ocean freight. On average, ocean freight rates from China to the U.S. West Coast have risen by over 70% in less than a year. This increase and several other impacts mirror the 2018 trade war, which ironically was also triggered by President Donald Trump. The rising costs, while other factors could be considered, can largely be ascribed to businesses rushing to import goods before tariffs take effect, which has strained port infrastructure, leading to congestion and longer lead times.
According the Drewry, the World Container Index has increased by 21% in May 2025, however, this measure is also as volatile as most other indicators, effectively expressing the turbulent times the logistics industry finds itself in and the inability to accurately forecast shipping costs.
Furthermore, a notable seismic shift is brewing where companies are rapidly reevaluating their sourcing strategies. Manufacturers are increasingly reflecting and seeking alternative production hubs in Southeast Asia and India to mitigate the risk of the U.S.-China trade tensions.
The U.S. market, though, has not been spared from the impacts of the trade war. U.S. exports have shown significant declines from major ports. The already ailing Port of Portland, which has suffered reported losses exceeding 30 million dollars over the past three years, has seen a sharp decline of 50% in export volumes. The Port of Tacoma, which is one of the largest container ports in the U.S., has reportedly experienced a 28% reduction in export volumes.
When shifting our focus closer to home, South Africa, which offers the world so much in minerals, agriculture, and manufacturing, has also historically been a vital link in the international supply chain. One may be tempted to speculate on the underlying reasons, but it is painfully obvious that South Africa has also not been spared from President Trump’s administration.
Despite this, and it may appear contradictory, for the moment, South African logistics would experience a less pronounced impact. However, South Africa is not in isolation outside of global supply chains. The global arena, for the moment, has had and continues to have an impact on South African logistics, which in turn would ultimately impact the consumer. In addition to rising shipping costs, knee-jerk higher demands in the U.S., reshaping of global trade routes, differentiated sourcing strategies, and what could be viewed as “international pivoting” will continue to have a major impact on shipping costs, equipment availability and shipping delays.
Internationally, but more specifically in South Africa, being a vital artery for Southern Africa, being able to be agile in this ever-changing landscape, adjusting to market demand, and logistics planning would be critical.
Broader Economic Consequences
According to the Oxford Dictionary, the term “socioeconomic” is defined as “relating to or concerned with the interaction of social and economic factors”.
This definition could not be more relevant when one reflects on the impact the tariff wars would have on South Africa.
Casting a glance beyond just the economic and examining the potential impact on society.
With a reported unemployment rate of 31.9% according to StatsSA in Quarter 4 2024, which rose to 32.9% in Quarter 1 2025, South Africa can least afford the social impact that the economics of the trade war will inflict.
According to sources, the tariffs are expected to result in a 35-to-70-billion-rand loss in 2025, with potential job losses reaching 30,000–50,000 by mid-2026. While these numbers are speculative, it is undeniable that any growth in the South African unemployment rate would be catastrophic. This could cause social instability in the impacted neighbourhoods as a result of the worsening unemployment rate, which would have a direct consequence on the already high crime rate.
Diplomatic and Trade Relations
Concerns have been raised by South African officials in reaction to these events. President Cyril Ramaphosa condemned the tariffs as “punitive” and a threat to bilateral trade. In order to reach a new trade agreement that guarantees long-term stability for both countries, he underlined the necessity of urgent and constructive negotiations.
Trade and Industry Minister Parks Tau has indicated that South Africa will seek clarity from the U.S. government regarding the basis for the 30% tariff, given that the country’s average tariff is 7.6%. The administration is stepping up attempts to diversify export markets across the globe to countries in Africa, Asia, Europe, and the Middle East, and intends to investigate further exemptions and advantageous quota arrangements with the U.S.
To stimulate development in the Information and Communication Technology (ICT) sector, Communications and Digital Technologies Minister Solly Malatsi published a proposed policy direction in the Government Gazette on 23 May 2025 (52712gen3218) that offers an alternative to the strict Broad-Based Black Economic Empowerment (B-BBEE) ownership requirements. Instead of transferring ownership directly, the new model would enable businesses to fulfil their empowerment commitments through equity equivalent programs (EEPs).
Conclusion
The United States’ 31% tariff on South African exports, imposed by President Donald Trump in April 2025, and the ensuing trade war have had monumental and are set to have further ripple effects across the world, and South Africa is not spared from the fallout. The effects of the current trade war, upon reflection, are starkly reminiscent of the one in 2018 which had very similar outcomes, however, this trade war and the focus on South Africa poses a serious threat to our nation’s economy and trading ties with the United States which may have far reaching social impacts.
While the South African government is actively seeking to mitigate the impact through diplomatic efforts and market diversification, the situation underscores the complexities of global trade dynamics and the need for strategic economic planning.
For Turners Shipping, as a proudly South African Freight Forwarder and Customs Broker, staying abreast of developments, being future-focused and displaying agility in this ever-changing landscape is vital in providing real-world solutions for our clients by leveraging our wealth of experience in this sector.
Gregory Marks
Turners Shipping Business Development and Transformation Manager