Angelika Goliger, Chief Africa Economist at EY
As new US reciprocal tariffs set to reshape global trade dynamics, South Africa is poised to accelerate export diversification and bolster vulnerable sectors to mitigate projected economic fallout.
EY’s latest macroeconomic analysis forecasts potential job losses of around 100 000, primarily in agriculture and automotive industries, but highlights opportunities for resilience through strategic realignments and exemptions for critical minerals like platinum group metals (PGMs).
The tariffs, ranging from 10% to 41% on imports from 69 countries and effective from early August, will add to existing duties under Section 232 and the Inflation Reduction Act, overriding prior exemptions.
South Africa faces a 30% rate, alongside peers like India (25%), Brazil (50%), Taiwan (20%), Switzerland (39%), Canada (35%), Mexico (18%), and Vietnam (22%). According to the US Trade Representative, these measures signal a long-term pivot toward supply chain realignment and domestic reindustrialisation, unlikely to reverse soon.
EY’s Chief Africa Economist, Angelika Goliger, underscored the forward path amid these challenges. “While the tariffs could strain key exports like citrus, wine, soybeans, sugar cane, and beef, exemptions for PGMs will provide a buffer, enabling South Africa to pivot toward high-value mineral trade and emerging markets,” Goliger said.
In response, South African authorities have deemed the tariffs unjustified, asserting the nation poses no trade or national security threat.
The Central Bank Governor anticipates significant employment risks but emphasises that targeted interventions could limit broader damage. To this end, an Export Support Desk has been established to offer advisory services and market diversification strategies, prioritising the preservation of US access while exploring alternatives.
“Looking ahead, the government’s proactive Export Support Desk will be crucial in guiding businesses toward diversification, potentially unlocking new opportunities in Asia and the EU to offset US market losses,” according to Angelika Goliger
A comprehensive support package for affected businesses and workers is in the final stages, drawing on tools like the Unemployment Insurance Fund and temporary relaxations in competition law to foster exporter collaboration.
“These measures will not only cushion immediate impacts but position South Africa for stronger, more resilient trade networks in a post-tariff world,” Goliger added. “By accelerating diversification, we could see a rebound in export volumes within 12-18 months, particularly if global commodity demand stabilises amid US-China tensions.”
EY’s analysis projects that while short-term disruptions may weigh on growth, strategic shifts could enhance long-term competitiveness. With PGMs exempted, the mining sector stands to benefit from sustained investor interest in critical minerals essential for green technologies. Agriculture and automotive firms, however, will need agile adaptations, such as supply chain rerouting and innovation in sustainable practices, to thrive.
As South Africa navigates this evolving landscape, EY urges stakeholders to prioritise collaborative reforms.
“The tariffs represent a call to action for deeper integration into African Continental Free Trade Area opportunities and bilateral deals,” Goliger noted.
“Forward-thinking policies will help transform this challenge into a catalyst for shifting South Africa’s economic development trajectory.”
ENDS
