South Africa faces 30% US tariffs as trade deal stalls

South Africa Faces Major Trade Setback as US Tariffs Loom

South Africa is approaching a critical juncture as the United States prepares to impose a 30% tariff on all South African goods, effective 1 August 2025. This move follows a 90-day pause introduced by US President Donald Trump earlier this year to allow for bilateral trade negotiations.

The tariffs form part of Trump’s global “reciprocal trade policy”, aimed at countries the US believes maintain unfavourable trade balances with it.

Why Is the US Targeting South Africa?

In April 2025, Trump’s administration rolled out a 10% blanket tariff on all imports, with additional duties for nations holding what the US considers unfair trade advantages. South Africa was flagged due to what the Trump administration claimed was a 60% trade imbalance in its favour.

According to the US, while it imported $14.8 billion in South African goods, it exported only $5.8 billion—resulting in the so-called imbalance. A “discounted” rate of 30% was applied instead of the full 60%, but the impact remains significant.

South Africa’s Government Pushes for a Trade Agreement

The South African government has been working to reach an agreement with the United States. Led by Minister of Trade, Industry and Competition, Parks Tau, a Framework Deal was submitted on 20 May 2025, covering key sectors like agriculture, critical minerals, and automotive exports.

Despite positive meetings in June, no final agreement has been signed. However, the US extended the original 9 July tariff deadline to 1 August 2025, offering a small window for further talks.

Ramaphosa Challenges US Tariff Justifications

“South Africa’s average tariff on imported goods stands at 7.6%, and 77% of US goods enter the country duty-free,” said President Cyril Ramaphosa.

Ramaphosa argues that the 30% tariff is based on a misleading interpretation of trade data and does not reflect actual tariff policies. South Africa awaits a formal trade framework template from the US, which would guide ongoing discussions.

Business Leaders Warn of Economic Fallout

Busi Mavuso, CEO of Business Leadership South Africa, said the new tariffs could disrupt trade, force rapid strategic shifts, and strain manufacturing and agriculture—the backbone of employment in South Africa.

“The expiry of the 10% tariff freeze and the imposition of the 30% tariff will be damaging for our economy, especially if South Africa also loses access to AGOA.”

The African Growth and Opportunity Act (AGOA) gives South African exports duty-free access to the US market. Its potential expiration, combined with the tariffs, could severely impact export revenue.

BMW South Africa Suspends US Exports

Automotive manufacturers are already feeling the pressure. BMW South Africa CEO Peter van Binsbergen confirmed the company will suspend vehicle exports to the US for two years, citing the uncertainty surrounding AGOA.

Trump Threatens Extra Tariffs Over BRICS Alignment

Trump also warned of an additional 10% tariff for countries aligning with anti-American BRICS policies. This raises the potential tariff burden on South African goods to 40%, a potentially crippling blow for exporters.

Trump Issues Warning Against Retaliation

“If you wish to open your heretofore closed markets to the United States, we will perhaps consider an adjustment… these tariffs may be modified, upward or downward, depending on our relationship with your country,” Trump said in his letter to President Ramaphosa.

South Africa is one of several nations—including Japan, Malaysia, and South Korea—that received similar notices.