The United States’ 30% tariff on South African goods is set to take effect next month, sparking widespread concern about its potential impact on the country’s economy. Of particular concern is the agricultural sector, which experts say will be among the hardest hit.
Minister of Trade, Industry, and Competition Parks Tau has warned that the incoming tariffs effectively nullify the African Growth and Opportunity Act (AGOA) agreement, a deal that has been a key contributor to the sector’s growth.
Speaking to VOC News, Wandile Sihlobo, Chief Economist at the Agricultural Business Chamber of South Africa, said that the United States is a major destination for South African agricultural exports, estimating that the monetary value of exports to the USA amounts to over R8 billion.
“The US is about 4% of our overall agricultural exports, but in monetary terms that is just around half a billion US dollars, and it’s also concentrated in a number of provinces such as the Western Cape, Mpumalanga, and KZN. So it is important that we continue to push through and are able to get better tariffs,” said Sihlobo.
He emphasized that the long-term solution lies in establishing a direct bilateral trade agreement between the U.S. and South Africa, one that does not rely on AGOA.
“When you’re thinking about the long-term sustainability of this, where we all imagine ourselves to be is at a point where there is a bilateral free trade agreement. So that we are not just getting the generosity of AGOA but moving into a relationship where we are bilateral rather than unilateral, which raises a lot of geopolitical tensions,” added Sihlobo.
