Citrus growers call on president to urgently intervene about 30% US tariff

The Citizen

2 days ago

While other industries can wait for government to negotiate the US tariff down, citrus growers could be stuck with boxes of rotten fruit.
With mere days to go before Friday, when the US tariff of 30% on South African goods kicks in, the Citrus Growers' Association of Southern Africa wrote to President Cyril Ramaphosa, calling on him to urgently intervene on behalf of rural communities in the Northern and Western Cape, where citrus exported to the US is grown and where livelihoods rely on the US-SA citrus trade.
'This week, with the tariff deadline on Friday, is one of great anxiety for the citrus growers in the Western and Northern Cape. These two provinces annually export about 7 million cartons of citrus to the US,' Dr Boitshoko Ntshabele, CEO of the Citrus Growers' Association of Southern Africa (CGA), says.
The association has asked Ramaphosa to urgently facilitate an extension of the current 10% US tariff beyond 1 August, which would allow for negotiations to reach a mutually beneficial trade agreement. The CGA also requested that, if a general extension of the deadline is not possible, an urgent request for a specific extension for seasonal fresh produce should be secured.
'Seasonal fresh produce is perishable and cannot be stored for extended periods like other trade products. We just passed the midpoint of the 2025 export season, which means that hundreds of thousands of cartons of citrus are ready in packhouses to be shipped to the US over the next few weeks. The implementation of a 30% tariff on 1 August will mean most of this fruit will be left unsold.'
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SA citrus growers no threat to US farmers—no reason for US tariff of 30%
South African citrus growers do not pose a threat to US growers or jobs, as they sustain demand when local US citrus is out of season, benefiting US consumers. 'Citrus as a source of nutrition also helps to keep America healthy. Should we not be able to secure a favourable trade deal or the concession for fresh produce, local job losses before the next season will be a certainty,' Ntshabele says.
Gerrit van der Merwe, chairman of the CGA, says being a grower in Citrusdal, he is very worried about the effect the tariffs will have on the town and the wider Cederberg municipality. 'Citrus forms the economic heart of the area.
'Not just farmers and farm workers will feel the impact, as local businesses and even the funding of social support programmes will be affected too. The social fabric of some rural towns in the Western and Northern Cape is threatened.
'Local growers also say a 30% tariff will not only stifle future growth but lead to the eventual destruction of between 500 and 1 000 ha of land that would simply become unprofitable.'
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Letter to the president about US tariff
In the letter to the president, the CGA highlighted that, while much focus has been placed on market diversification in the past few weeks as a general answer to the trade turmoil, certain realities must be considered.
'Citrus is grown for designated markets, each with their own precise market and plant health specifications. Therefore, it is not easy to simply divert citrus from the US and find a new market. Should some citrus be diverted away from the US, the diversion could very well depress the price in these markets through oversupply, negatively impacting the entire Southern African citrus industry.
'The citrus industry has the potential to create 100 000 additional jobs by 2032 because of new plantings, but for this to be realised, we require the expansion of every market—including the US, China, India, the European Union, and others,' the CGA says in the letter.
Ntshabele says while the CGA acknowledges measures of progress made in the US trade negotiations, it is of the opinion that more direct and active contact with the US is necessary before the 1 August deadline.
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US tariff much worse than losing Agoa status
Arthur Kamp, chief economist at Sanlam Investments, says South Africa's direct trade exposure to the US is relatively modest but not insignificant.
In 2024, goods exports to the US amounted to R156.8 billion (7.6% of total South African goods exports and 2.1% of GDP). The US announced a 30% tariff increase for South Africa.
'After taking the 25% US import tariff increases on aluminium, steel, and motor vehicles into account, while also adjusting for exclusions, we estimate the overall effective US tariff increase for South Africa is likely to be less than 20%.'
However, he points out that this is still a large increase and is likely to cause a sharp decrease in South African exports to the US, including motor vehicles. 'We note that vehicle exports to the US were already significantly down last month, indicating manufacturers readjusting and finding new markets for finished goods, as total vehicle exports were up by 3%.
'While some exclusions may also be rescinded, it is important to understand that the impact will be far greater than losing our AGOA (African Growth and Opportunity Act) status alone.
'Downward revisions to South Africa's gross domestic product (GDP) forecast for 2025 should result, while combined with heightened geopolitical risk, the effect on business sentiment and investment could be more pronounced, particularly given South Africa's dependence on the US for foreign capital, especially portfolio capital, which is highly liquid.'