South African businesses and officials are locked in discussions with the United States authorities over future trade arrangements as the July 8 deadline approaches for the expiration of the 90-day tariff relief offered by the U.S. government.
The current 10% universal tariff on South African goods is set to revert to a higher 31% rate imposed on Liberation Day, raising uncertainty for exporters.
In the face of this uncertainty, some have suggested that South Africa should accelerate efforts to diversify its agricultural exports to other regions.
While this strategy is generally supported, the agricultural sector relies heavily on access to the U.S. market.
China is often proposed as an alternative destination for exports. In 2023, it accounted for about 11% of global agricultural imports, valued at US$218 billion.
However, South Africa captured only 0.4% of that market, around US$979 million, exporting products such as fruits, wine, red meat, nuts, maize, soybeans, and wool.
Despite China’s commitments to easing trade for African countries, access remains limited by high tariffs and phytosanitary restrictions.
These barriers make it challenging for South African agriculture to increase its market share in China significantly at this time.
Expanding to new export markets involves more than just shifting product destinations. Building new trade relationships and establishing marketing channels takes time and effort from both private-sector exporters and trade agents. These steps come only after tariff and regulatory barriers are resolved.
Each region’s consumer preferences and economic conditions also influence the demand for South African agricultural products. This makes it essential to tailor trade efforts to different market characteristics.
The current export diversification plan requires a long-term approach. It depends first on the government’s focus and policy, followed by efforts from the private sector to create business relationships and solve logistical challenges, especially within the agricultural sector.
There is also a growing call for South Africa to maintain its existing access to the U.S. market while simultaneously working to expand into countries in Asia and the Middle East. These new markets are not intended to replace the U.S. but to complement South Africa’s existing trade relationships.
Horticulture and other agricultural sectors are seen as having strong potential for growth, provided that more export destinations are secured over time.
Policymakers are being urged to emphasise the complexities of entering new markets, especially during this period of shifting global trade policies.
Dedicated teams within trade departments are expected to focus on practical efforts to expand export opportunities.
Though the process is long and resource-intensive, it is essential for reducing trade risk and expanding agricultural exports in the medium to long term.
