US tariffs burden South African agriculture, government seeks market diversity - official

AS the U.S.-imposed tariffs on South Africa average at 30 percent, the South African agriculture is facing an additional heavy burden, said Mooketsa Ramasodi, director-general of the South African Department of Agriculture.

AI Brief

A 30% US tariff on South African farm goods threatens jobs and export income, especially in citrus and wine sectors.
South Africa is negotiating with the US and appealing to the WTO to ease the economic strain.
Leaders are working to expand trade with Asia to reduce dependence on the U.S. and protect the economy.

According to Trump's executive order on July 31, the U.S. modified its tariff rates under the so-called "reciprocal tariffs," which applied to dozens of countries and regions, including South Africa. The surging tariff squeezes the incomes of South African farmers, and puts the employment of agricultural and related sectors at risk.

"The South African agriculture sector contributes 3 percent to the GDP of the country, and also contributes 5.8 percent to general employment in South Africa. So, it's a really important sector for our country, and the imposition of the 30 percent tariff is going to have an impact on all the exports we have, especially in terms of citrus and in terms of wines," said Ramasodi.

The steep tariff hikes might force many local small and medium-sized farmers out of the export markets, leading to concerns about rural poverty. The South African government is in talks with the U.S. to push for a more reasonable tariff rate, according to Ramasodi.

Analysts pointed out that the U.S. tariff fluctuations have warned the South African leaders that the over-reliance on unilateral trade ties is putting the country's economy over a barrel, and that the country should seek trade diversification to reduce vulnerability to U.S. tariffs.

By now, the South African government is stepping up efforts to expand cooperation with China, Japan, South Korea, and Southeast Asian countries.

"We are also looking at a trade diversification strategy -- that would ensure that our products outgoing into different areas. If we get markets, then we would be able to lessen the impact of the 30 percent tariffs by the U.S.," said Ramasodi.