The newly imposed 30% import tariff by the United States on South African goods has already started to affect businesses, especially in sectors that rely on international trade and US partnerships.
Businesses feel the heat from Trump’s tariff hike
The tariffs, signed into law by US President Donald Trump on 31 July 2025, officially come into effect on Friday, 8 August 2025. This move is part of a wider trade policy affecting multiple countries, not just South Africa.
Nedbank, in an interview with BusinessTech, has raised concerns about how the tariffs could hit retail franchises, including popular US brands like McDonald’s, Burger King, and Starbucks, which depend on imported ingredients and products.
Karen Keylock, the bank’s Retail Services head, warned that “if brands can’t maintain supply or raise prices, they may limit expansion or exit the market altogether.”
What the 30% tariff means for South Africa
A tariff is a tax that a country puts on goods that are imported from another country.
In this case, US companies will pay more to import South African products, making those products more expensive and possibly less attractive.
The South African government says this decision will reduce exports, weaken the rand, and lower consumer spending.
According to economic forecasts, it could shave 0.2% off South Africa’s GDP growth. While 35% of exports are still exempt—like pharmaceuticals and minerals—many industries remain vulnerable.
Government responds with economic support plan
To deal with the fallout, the government has launched several response measures aimed at helping businesses adapt. These include:
- Export Support Desk: A service to help businesses find new global markets and get advice on exporting.
- Localisation Fund Support (LSF): Funding for businesses to produce more locally and improve efficiency.
- Export and Competitiveness Support Programme (ECSP): A financial package that provides working capital and upgrades to help companies stay competitive.
- Job support: Measures from the Department of Labour to prevent job losses by adjusting existing aid programmes.
- Block Exemption for Exporters: A legal allowance that lets competing companies work together to reduce export costs without breaking competition laws.
Plans to reduce reliance on the US
The Department of Trade says it is expanding trade ties with other regions, especially Africa, Asia, the Middle East, and Europe.
New trade and investment deals are being explored with countries like China, Japan, Thailand, the UAE, and Saudi Arabia.
A recent agreement with the European Union has already unlocked a R90 billion investment package.
South Africa is also promoting local brands. Nedbank’s Keylock noted that local chains like Nando’s, Chicken Licken, and Steers may benefit as consumers shift to local alternatives that aren’t affected by tariffs.
Despite the setbacks, both the government and private sector say they are prepared to adapt supply chains, diversify markets, and protect jobs.
South Africa’s trade officials continue to negotiate with the US, but acknowledge that “businesses and consumers must prepare for disruptions.”