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Reuters
5 days ago
- Business
- Reuters
US tariffs on South Africa set to hit white farmers Trump has embraced
CITRUSDAL, South Africa, July 9 (Reuters) - U.S. President Donald Trump's threatened 30% tariff on South African exports is set to deal an economic blow to a community he has vocally and controversially championed: white farmers. Citing false claims that white South Africans are being persecuted, Trump has cut aid to the country, publicly berated its president in the Oval Office and invited Afrikaners - descendants of early European settlers - to come to the United States as refugees. But for white farmers who remain rooted in their homeland and aspire to keep making a living from the land, the tariffs due to come into effect on August 1 are an assault on those ambitions. "It doesn't make sense to us to welcome South African farmers in America and then the rest that stays behind ... to punish them," said Krisjan Mouton, a sixth-generation farmer in Western Cape province's citrus heartland. "It's going to have a huge impact," he said, standing among rows of trees heavy with navel oranges on his farm near the town of Citrusdal. "It's not profitable to export anymore to the USA." After a three-month pause, Trump escalated the global trade offensive he launched in April, announcing tariffs on more than a dozen countries on Monday, including South Africa. Its citrus fruit, along with wine, soybeans, sugar cane and beef, had previously benefited from duty-free access to the U.S. under the Africa Growth and Opportunities Act. Helped by that trade initiative, South Africa, the world's second-largest citrus exporter after Spain, generates $100 million annually from the U.S. market. The new tariff ends that preferential treatment. And with three-quarters of South Africa's freehold land white-owned, white farmers will face the immediate economic fallout though they will not be the only casualties. Boitshoko Ntshabele, chief executive of the Citrus Growers' Association of Southern Africa (CGA) said the levy will hurt all South African farmers and farm workers, no matter their race. "A 30% tariff would wreak havoc on communities that have, for decades, focused on producing specifically for the U.S. market," he said. Its location in the Southern Hemisphere means South Africa produces citrus at times of the year when the U.S. doesn't, with its exports giving U.S. consumers year-round access to fruit. While the United States accounts for only around 6% of South Africa's citrus exports, some farming areas produce specifically for the U.S. market. Redirecting produce grown for the U.S. to other markets is not simple, as size and plant health requirements vary from country to country. Nestled in a valley in Western Cape's rugged Cederberg mountains, Mouton's family farm employs 21 permanent workers, and nearly triple that number during peak picking season. The CGA has said about 35,000 jobs are at risk in Citrusdal alone, as the tariffs risk making South African citrus uncompetitive compared to fruit from Peru, Chile, and Australia. South African President Cyril Ramaphosa has said trade talks with Washington will continue and argued that the 30% rate was based on an inaccurate understanding of the two countries' trade. In the meantime though, the CGA wants to speed up an expansion of exports to new markets including China and India. High tariffs in some countries and stringent plant health requirements in the European Union, for example, make that a complicated prospect, however. Not far from Mouton's farm, workers are carrying on as usual, for now, sorting and packing fruit at the 14,000-square-metre Goede Hoop Citrus warehouse. But if the 30% levy remains in place, that won't last long, managing director Andre Nel told Reuters. "Farmers will go bankrupt. For sure there would be job losses within our sector," he said. "I don't even want to think about it." ($1 = 17.8568 rand)
Yahoo
07-07-2025
- Business
- Yahoo
Trump Tariffs Sour the Fortunes of South Africa's Citrus Farmers
(Bloomberg) -- Walk down the aisles of a Trader Joe's or Whole Foods Market in the US, and chances are many of the piles of oranges, lemons, limes and grapefruit will be labeled 'Produce of South Africa.' Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals Trump's Gilded Design Style May Be Gaudy. But Don't Call it 'Rococo.' Are Tourists Ruining Europe? How Locals Are Pushing Back Massachusetts to Follow NYC in Making Landlords Pay Broker Fees In California, Pro-Housing 'Abundance' Fans Rewrite an Environmental Landmark They have become a staple in the US — the world's largest citrus importer — especially during the off-season summer months when in the southern hemisphere the South African winter harvest is at its peak. But now, those supplies are threatened by a potential 31% tariff that President Donald Trump has said will go into effect on July 9, adding that he won't consider delaying the deadline. The looming levy has cast a cloud over the sunny valleys of Citrusdal, a tiny, serene farming town nestled amid rolling green hillocks in the Western Cape area of South Africa. Tucked into the base of the Cederberg mountains about 100 miles north of Cape Town, the area is dominated by citrus farms, giving the town its name. For a quarter century, the juicy produce of the area's orchards — owned over generations by people mostly of Afrikaner heritage — has journeyed thousands of miles to make it to the fruit bowls of American homes. But this season is different. Now, Trump's tariff policies are threatening the very same White farmers to whom he offered asylum, falsely claiming that they are targets of a genocide and that their land is being seized by the state. The levies are likely to have a debilitating impact on their operations, the livelihoods of the thousands of people they employ and the country's 35 billion-rand ($2 billion) citrus industry — one of the rare bright spots in South Africa's stagnant economy. 'Our business is built for the US market, and for about 25 years we've planted, we've picked, we've planned accordingly,' said Gerrit van der Merwe, the chief executive officer of family owned ALG Estates, as he stood in his 2,500-acre farm donning a gray puffer jacket, jeans and a pair of Veldskoen — leather footwear made famous by Afrikaner farmers. South Africa is the world's second-largest exporter of citrus fruits, behind Spain. Trump's tariffs are now threatening to price farmers in the Western Cape — the country's prime area for the produce — out of a key market, leaving them to navigate an uncertain future. Citrus growers have been preparing for a new reality. Over recent weeks, some orchards have been in a panicked rush to get their produce to the US market ahead of the looming deadline. Van der Merwe's farm, whose packing season began May 1, has been working on getting as much fruit as possible on vessels and shipped, he said. But longer term, the damages could be more devastating and may push farmers to shrink orchards that are specifically developed to meet demand in the US, said Van der Merwe, whose farms employ 2,000 people and have been managed by his family for eight generations. 'We've built our supply chains, we've built our supermarkets, we've built our importing companies on that side, so we've been trying to own that market to make sure that we are very, very efficient, and that we can send the maximum fruit into that market,' he said. 'For us, we've become dependent on the US market, but also the US consumers have also become dependent on our fruit.' The US is the second-largest destination for South African exports after China, accounting for more than $20 billion last year. Major exports include precious stones and metals, organic chemicals and edible fruit. Although the nation sends just 5% to 6% of its citrus produce to the US, the exports had been expected to rise about 7.7% to 7 million cartons this season, and the industry had ambitious plans to grow that share. The US duties will be the latest blow to the industry that employs about 140,000 people at the farm level. A rare South African export success, it has been threatened by the crumbling domestic infrastructure at state-owned rail and ports operator Transnet SOC Ltd., that has been blamed for delays and dwindling shipments of key commodities. Should the higher tariff 'take effect, it would make our citrus completely uncompetitive in the US market,' said Boitshoko Ntshabele, CEO of the Citrus Growers' Association. The CGA estimates that logistical inefficiencies already cost the sector 5.3 billion rand a year. South Africa is among countries slapped with the steepest tariffs, placing it at an immediate disadvantage while competing with its citrus producing South American rivals, like Peru and Chile. To mitigate the impacts of the tariffs, growers may opt to reroute their fruit to other markets, including Europe, but that could undermine the stability in those markets and have 'a knock-on effect on the entire Southern African citrus industry,' Ntshabele warned. The sector is 'looking to add about 100 million export cartons by 2032, and therefore continuously working on diversifying exports markets,' he said. 'This will remain our focus in the near term.' Europe is already among the biggest citrus export markets for South Africa. The industry is also locked in a long-running dispute over the European Union's regulations, which mandated stringent cold-treatment measures and additional inspections of South African citrus following cases of fruits affected by the false codling moth. The moth lays eggs on the surface of the fruit, and the larvae that emerge from the eggs burrow into the rind, develop brown discoloration and render the fruit moldy and unmarketable. The CGA says EU regulations cost the industry about 3.7 billion rand each season. As farmers look to widen their export markets, they could turn to China and other Asian countries, said Paul Makube, a senior agricultural economist at First National Bank. China's recent announcement of a plan to grant 53 African nations tariff-free access presents an opportunity for citrus farmers to expand there. 'It has become increasingly important to start diversifying, and with the Asian markets with their big populations and income growth in China, India, they need to start opening up those Asian markets,' Makube said. That said, growing the industry's presence in the world's top market for the fruits remains critical. South African President Cyril Ramaphosa sought to reset strained relations with the US during an Oval Office meeting with Trump in Washington in May. South Africa is asking the US to drop its reciprocal tariff to the 10% baseline. 'We believe that if we have a live conversation going, we will be excluded from the 30%, maybe sitting with the 10%,' said Agriculture Minister John Steenhuisen. 'That still allows us to compete against some of our competitors, particularly in the South American market.' There are no signs that will happen, and at ALG Estates, Van der Merwe is worried. 'I think 10% is manageable; it's not ideal,' he said. 'For now, we're asking to be handled the same as Peru and Chile — our competition. Otherwise, we can't compete.' --With assistance from Jennifer Zabasajja, Andre-Pierre Du Plessis and Naomi Kresge. For Brazil's Criminals, Coffee Beans Are the Target SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too Sperm Freezing Is a New Hot Market for Startups Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate China's Homegrown Jewelry Superstar ©2025 Bloomberg L.P.
News24
07-07-2025
- Business
- News24
SA's citrus farmers brace for Trump tariffs impact
Walk down the aisles of a Trader Joe's or Whole Foods Market in the US, and chances are many of the piles of oranges, lemons, limes and grapefruit will be labelled 'Produce of South Africa'. They have become a staple in the US — the world's largest citrus importer — especially during the off-season summer months, when in the Southern Hemisphere the South African winter harvest is at its peak. But now, those supplies are threatened by a potential 31% tariff that President Donald Trump has said will go into effect on 9 July, adding that he won't consider delaying the deadline. The looming levy has cast a cloud over the sunny valleys of Citrusdal, a tiny, serene farming town nestled amid rolling green hillocks in the Western Cape area of South Africa. Tucked into the base of the Cederberg mountains about 100 miles north of Cape Town, the area is dominated by citrus farms, giving the town its name. For a quarter-century, the juicy produce of the area's orchards — owned over generations by people mostly of Afrikaner heritage — has journeyed thousands of miles to make it to the fruit bowls of American homes. But this season is different. Now, Trump's tariff policies are threatening the very same white farmers to whom he offered asylum, falsely claiming that they are targets of a genocide and that their land is being seized by the state. The levies are likely to have a debilitating impact on their operations, the livelihoods of the thousands of people they employ and the country's R35 billion citrus industry — one of the rare bright spots in South Africa's stagnant economy. 'Our business is built for the US market, and for about 25 years we've planted, we've picked, we've planned accordingly,' said Gerrit van der Merwe, the chief executive officer of family owned ALG Estates, as he stood in his 2 1 000-hectare farm donning a grey puffer jacket, jeans and a pair of Veldskoen — leather footwear made famous by Afrikaner farmers. South Africa is the world's second-largest exporter of citrus fruits, behind Spain. Trump's tariffs are now threatening to price farmers in the Western Cape — the country's prime area for the produce — out of a key market, leaving them to navigate an uncertain future. Citrus growers have been preparing for a new reality. Over recent weeks, some orchards have been in a panicked rush to get their produce to the US market ahead of the looming deadline. Van der Merwe's farm, whose packing season began 1 May, has been working on getting as much fruit as possible on vessels and shipped, he said. But longer term, the damages could be more devastating and may push farmers to shrink orchards that are specifically developed to meet demand in the US, said Van der Merwe, whose farms employ 2 000 people and have been managed by his family for eight generations. 'We've built our supply chains, we've built our supermarkets, we've built our importing companies on that side, so we've been trying to own that market to make sure that we are very, very efficient, and that we can send the maximum fruit into that market,' he said. 'For us, we've become dependent on the US market, but also the US consumers have also become dependent on our fruit.' The US is the second-largest destination for South African exports after China, accounting for more than $20 billion last year. Major exports include precious stones and metals, organic chemicals and edible fruit. Although the nation sends just 5% to 6% of its citrus produce to the US, the exports had been expected to rise about 7.7% to 7 million cartons this season, and the industry had ambitious plans to grow that share. The US duties will be the latest blow to the industry that employs about 140 000 people at the farm level. A rare South African export success, it has been threatened by the crumbling domestic infrastructure at state-owned rail and ports operator Transnet, that has been blamed for delays and dwindling shipments of key commodities. Should the higher tariff 'take effect, it would make our citrus completely uncompetitive in the US market,' said Boitshoko Ntshabele, CEO of the Citrus Growers' Association. The CGA estimates that logistical inefficiencies already cost the sector R5.3 billion a year. South Africa is among countries slapped with the steepest tariffs, placing it at an immediate disadvantage while competing with its citrus producing South American rivals, like Peru and Chile. To mitigate the impacts of the tariffs, growers may opt to reroute their fruit to other markets, including Europe, but that could undermine the stability in those markets and have 'a knock-on effect on the entire Southern African citrus industry,' Ntshabele warned. The sector is 'looking to add about 100 million export cartons by 2032, and therefore continuously working on diversifying exports markets,' he said. 'This will remain our focus in the near term.' Europe is already among the biggest citrus export markets for South Africa. The industry is also locked in a long-running dispute over the European Union's regulations, which mandated stringent cold-treatment measures and additional inspections of South African citrus following cases of fruits affected by the false codling moth. The moth lays eggs on the surface of the fruit, and the larvae that emerge from the eggs burrow into the rind, develop brown discolouration and render the fruit mouldy and unmarketable. The CGA says EU regulations cost the industry about R3.7 billion each season. As farmers look to widen their export markets, they could turn to China and other Asian countries, said Paul Makube, a senior agricultural economist at First National Bank. China's recent announcement of a plan to grant 53 African nations tariff-free access presents an opportunity for citrus farmers to expand there. 'It has become increasingly important to start diversifying, and with the Asian markets with their big populations and income growth in China, India, they need to start opening up those Asian markets,' Makube said. That said, growing the industry's presence in the world's top market for the fruits remains critical. South African President Cyril Ramaphosa sought to reset strained relations with the US during an Oval Office meeting with Trump in Washington in May. South Africa is asking the US to drop its reciprocal tariff to the 10% baseline. 'We believe that if we have a live conversation going, we will be excluded from the 30%, maybe sitting with the 10%,' said Agriculture Minister John Steenhuisen. 'That still allows us to compete against some of our competitors, particularly in the South American market.' There are no signs that will happen, and at ALG Estates, Van der Merwe is worried. 'I think 10% is manageable; it's not ideal,' he said. 'For now, we're asking to be handled the same as Peru and Chile — our competition. Otherwise, we can't compete.'
