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Daily Maverick
3 days ago
- Business
- Daily Maverick
Private sector mobilises as government falters in US tariff fallout
As South Africa absorbs the first real economic blow of the second Trump presidency, the business sector, not government, is leading the response. A 30% tariff hits hard, but it's the scramble that follows that may define the country's economic trajectory. Unlike President Cyril Ramaphosa, who has been widely criticised for his slow response to economic crises, the private sector has already moved to propose interventions to blunt the blow of the US tariffs. Busi Mavuso, chief executive of Business Leadership South Africa, points out that although businesses can eventually adapt, urgent temporary support is essential. 'The recently announced Export Support Desk is a welcome first step, but swift implementation of broader measures is critical,' she said. Mavuso has recommended the urgent establishment of a Trade Crisis Committee, modelled on the National Electricity Crisis Committee, to coordinate the Treasury, government departments and business in opening new markets, unlocking funding support and protecting jobs. While business is clearly mobilising, the government's efforts remain fragmented. The Export Support Desk exists, and sector-specific support from the Industrial Development Corporation (IDC) and Department of Employment and Labour is being mooted. But as Old Mutual Wealth's Izak Odendaal warns, these are 'triage measures, not strategic pivots'. Workers are reporting their concerns and fears to their unions. As Cosatu's Matthew Parks told Daily Maverick, the damage is much larger than the loss of a single job. 'The damage might look small at first, but it has a massive knock-on effect. If a company closes, you lose jobs, then the town loses its economy, schools, clinics, police stations. Everything collapses. It devastates entire communities.'At least 30,000 jobs are at risk due to the tariff increases. According to the South African Federation of Trade Unions, up to 70,000 jobs could be lost. Further losses are possible as the knock-on effects on supply chains develop. Impact by numbers Economist Annabel Bishop of Investec said the tariff impact was already stark. According to the National Association of Automobile Manufacturers of South Africa, South African automotive exports to the US dropped by 82.2% year-on-year in unit terms in the first half of 2025. South African Revenue Service (SARS) data for the same period, Bishop noted, showed that 'vehicles and accessories (including parts) is down 45%, still the largest fall in any category'. While these drops include some lagging effects from early uncertainty, Bishop warned that 'the full, direct impact from tariffs will become more apparent from 2026' due to contract lags. But she added that beyond tariffs, 'The biggest hindrance to export growth remains the insufficient performance from Transnet to meet export freight demand.' Resilience amid disruption Despite the economic disruption, some industries remain surprisingly robust. The citrus industry, for example, reported record export values of R7.1-billion in the first half of 2025, according to Citrus Growers Association data. Johannesburg Stock Exchange CEO Leila Fourie told Daily Maverick that while citrus, beef, soy and automotive exports were most exposed, the overall GDP impact was currently estimated at around 0.2%. 'There are more targeted impacts in agri markets such as citrus, beef and soy, and the automotive sector,' said Fourie, who added that the imposition of the US tariffs had accelerated South Africa's efforts to diversify trade. 'We are seeing re-engagement with China, the EU, South America and South Asia.' The Citrus Growers Association agreed that while the current state of affairs was challenging, it could be reversed. 'This is not the end,' stated CEO Dr Boitshoko Ntshabele in a statement to Daily Maverick, 'but the end of the beginning. 'Not retaining and expanding markets across the board — including the US, China and others — will be a massive missed opportunity for job creation by the South African government.' Strategy missing in action Industry groups, too, feel sidelined. The Citrus Growers Association says it was not meaningfully consulted before the US tariffs were finalised, and some exporters now face punitive duties on shipments already in transit. The National Association of Automobile Manufacturers of South Africa is warning of long-term risks to domestic production. Parks said that government mitigation measures may not be implemented quickly enough to prevent fallout. He cited challenges with measures implemented during the Covid-19 pandemic as an example.'It's like putting a plaster on a bullet wound. The government talks about exemptions, but those structures don't exist. During Covid, it took months to get support to workers. This will be no different.' The bigger challenge may be Pretoria's diplomatic footing. 'South Africa doesn't export anything to the US that they can't get elsewhere,' said Odendaal. 'So our best bet is to be pragmatic — use our foreign policy to unlock trade, not constrain it.' Parks said that negotiations with the US were one-sided and that Trump's administration had deviated from diplomatic protocol. 'The Trump era has rewritten the rulebook. Old diplomatic tools don't work. If we want to fix this, it needs to go straight to the presidential level.' DM
The Citizen
5 days ago
- Business
- The Citizen
Government must actively manage fallout from US tariffs with trade crisis committee
The US tariffs pose a severe threat to South Africa's manufacturing and farming sectors, particularly in the Eastern Cape. Government must urgently and actively manage the fallout from the US tariffs with a trade crisis committee after the US administration imposed an import tariff of 30% on goods from South Africa. Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), says while businesses can eventually adapt, urgent temporary support is essential. 'The recently announced Export Support Desk is a welcome first step, but swift implementation of broader measures is critical. 'Government should establish a Trade Crisis Committee, modelled after successful crisis response frameworks such as the National Electricity Crisis Committee. This body, including National Treasury, business leaders and key government departments, would ensure fast, coordinated action to open new markets, provide financial support and maintain employment.' ALSO READ: 'It's just gone' – Trump's tariffs cost SA company R750m overnight BLSA welcomes Ramaphosa's measures to deal with US tariffs Mavuso welcomed president Cyril Ramaphosa's announcement that 'a number of measures' will be implemented to assist affected companies, but she points out that these measures must be put in place quickly 'or we risk catastrophic collapse of manufacturing and farming businesses, particularly in regions like the Eastern Cape which has major automotive industry supply chains'. 'On the weekend, a company that builds sophisticated machinery and software for the automotive industry in the province, Jendamark Automation, said it lost contracts worth R750 million due to the tariffs. 'Jendamark employs 500 people but buys inputs from other companies that employ 3 000 people. In the Western Cape, farmers producing everything from raisins to ostrich leather also face considerable uncertainty due to the tariffs. 'Over time, companies can identify new markets and pivot to different outputs, but the short-term shocks could destroy many jobs that will never come back if we do not provide temporary support.' ALSO READ: Tau launches urgent support measures for exporters affected by US tariffs Export Support Desk could productively help companies with US tariffs The first measure was announced by department of trade, industry and competition Minister Parks Tau with the establishment of an 'Export Support Desk' in his department that will support companies affected by tariffs through the global network of high commissions and embassies to access new markets. Mavuso says the desk could productively assist businesses to access new markets. 'I hope it does. However, business is at the coalface every day, engaging with customers around the world, seeking new markets and looking to strike deals for our factories and farms to supply goods. 'We have a great deal of experience in understanding what makes access to a new market feasible and what frustrates it. There are many parts of the story, starting with logistics and the physical challenges of getting goods to a new location through to the trade policies of the markets we could be serving. 'A standing crisis committee, consisting of business leaders and government officials from key departments, should be established to ensure rapid information flow and coordinated efforts. I encourage the president to establish a Trade Crisis Committee that brings together business leaders and key government officials to jointly chart a path forward.' ALSO READ: US tariff of 30% confirmed for SA but negotiations continue, president says Mavuso says this committee must include National Treasury. 'We already have proven crisis response tools that were developed for Covid-19 and the 2021 KwaZulu-Natal unrest. These can be adapted for our current trade challenges. Temporary loan schemes and employment support programmes will be essential to prevent a jobs catastrophe as factories face closure. 'We have an excellent template to follow: the National Electricity Crisis Committee, which proved pivotal in addressing the energy crisis. This model is already being deployed through the National Logistics Crisis Committee and can be adapted for trade challenges. 'The Presidency's coordinating role has been crucial in these examples, bringing together multiple government actors for rapid decision-making and joint problem-solving. Business and government working together will be vastly more effective than either sector attempting to navigate this crisis alone.'
Daily Maverick
5 days ago
- Business
- Daily Maverick
US tariff decision means SA must adapt quickly in a turbulent trade environment
While all channels of communication remain open to engage with the US, the international trading system is changing and complacency will not serve us – building resilience is imperative. The decision by the US to impose a 30% tariff on South African imports highlights the urgency with which we have to adapt to increasingly turbulent headwinds in international trade. The US is South Africa's second-largest trading partner by country and these measures will have a considerable impact on industries that rely heavily on exports to that country and on the workers they employ, as well as on our fiscus. Domestic sectors such as agriculture, automotive and textiles have historically benefited from duty-free access to the US market under the African Growth and Opportunity Act (Agoa). Our trade relations have historically been complementary in nature. South African exports do not compete with US producers and do not pose a threat to US industry. It remains our aspiration that this should continue. Largely, our exports are inputs into US industries and therefore support the US' industrial base. South Africa is also the biggest investor from the African continent into the US, with 22 of our companies investing in a number of sectors including, mining, chemicals, pharmaceuticals and the food chain. South African imports ultimately benefit US consumers in terms of both choice and cost. By way of example, citrus production is counter-seasonal and does not pose a threat to US production. Furthermore, production by US companies has been on the decline for a number of years as the US sector grapples with low yields, a citrus greening disease and other factors unrelated to competition from imports. Imports from South Africa, the world's second-largest citrus exporter, have filled a gap and contributed to stable supply and prices for US consumers. As government, we have been engaging the US to enhance mutually beneficial trade and investment relations. All channels of communication remain open to engage with the US. Our foremost priority is protecting our export industries. We will continue to engage the US in an attempt to preserve market access for our products. We must also accelerate the diversification of our export markets, particularly by deepening intra-African trade. Reducing overdependence on certain markets is a strategic imperative to build the resilience of our economy. With a view to helping our producers and exporters aggressively explore alternative markets, we have established an Export Support Desk to assist affected producers. We will in due course be announcing the modalities of a support package for companies, producers and workers that have been rendered vulnerable by the US tariffs. This intervention will also play a key role in guiding industries looking to expand into new markets in the rest of Africa, Asia, the Middle East and markets we already have trade agreements with. Strengthening regional value chains will be key to building resilience for our export markets in the longer term. Much as strengthening and establishing alternative value chains will take time, this moment presents us with an opportunity to push forward with the implementation and expansion of the African Continental Free Trade Area (AfCFTA). Reducing overdependence on certain markets is a strategic imperative to build the resilience of our economy. It will also enable us to expand the frontiers of opportunity for South African businesses, goods and services. In the coming months we will be scaling up our trade missions into new markets in Africa and beyond, as well as the National Exporter Development Programme whose aim is to grow the pool of export-ready companies. It is important to understand that South Africa is not alone in facing high tariffs from the US. A number of export-reliant developed and developing economies, including several on the continent, are also grappling with these measures. The international trading system is changing. Complacency will not serve us, and building resilience is imperative. As government we remain committed to ongoing engagement with the US and building trade resilience. DM This is the President's weekly letter to the nation, released on Monday.
IOL News
5 days ago
- Business
- IOL News
Business Leadership SA calls on Ramaphosa to establish trade crisis committee amid US tariff hike
Business Leadership South Africa has urged President Ramaphosa to establish a trade crisis committee in response to the steep US tariff hike, warning of the potential impact on jobs, investment, and economic stability. Image: Mandel NGAN / AFP In response, the DTIC describes the Export Support Desk as a vital lifeline for exporters navigating the fallout from the escalating trade tensions. "The Department of Trade, Industry and Competition (the dtic) has established an Export Support Desk, which will serve as a direct point of contact for companies affected by the U.S. tariff hike," the department said. "Exporters are encouraged to engage directly with the Export Support Desk and also to visit the dtic website regularly for updates and support mechanisms". Meanwhile, Business Leadership South Africa CEO Busisiwe Mavuso has called for President Cyril Ramaphosa to establish a dedicated trade crisis committee to coordinate the country's response to the looming US tariffs. "A standing crisis committee, consisting of business leaders and government officials from key departments, should be established to ensure rapid information flow and coordinated efforts,". Mavuso said. "I encourage the president to establish a Trade Crisis Committee that brings together business leaders and key government officials to jointly chart a path forward. This committee must include National Treasury. We already have proven crisis response tools that were developed for Covid-19 and the 2021 KwaZulu-Natal unrest" IOL News [email protected] Get your news on the go, click here to join the IOL News WhatsApp channel
The South African
5 days ago
- Business
- The South African
Ramaphosa unveils support plan for exporters hit by US tariffs
President Cyril Ramaphosa believes resilience is imperative as the international trading system remains turbulent. In his weekly newsletter, Ramaphosa responded to the United States' decision to impose 30% tariffs on certain imports, stating that it highlights the urgent need for South Africa to adapt to shifting international trade conditions. The president warned that the tariffs would significantly impact key sectors including agriculture, automotive, and textiles, along with the workers in these industries. In response, the government has launched an Export Support Desk to assist affected producers. US President Donald Trump's decision to impose higher tariffs on South Africa and other countries is to encourage US consumers to buy more American-made goods. However, Ramaphosa refused the claims. He said South Africa and the US's trade relations have historically been complementary. 'South African exports do not compete with US producers and do not pose a threat to US industry. It remains our aspiration that this should continue,' said the president. He also added that South African imports benefit US consumers in terms of both choice and cost. CHANNELS OF COMMUNICATION REMAIN OPEN WITH THE US Despite the developments, Ramaphosa stressed that diplomatic channels with the US remain open. He added that the priority is protecting the country's export industries. 'We will continue to engage the US in an attempt to preserve market access for our products. We must also accelerate the diversification of our export markets, particularly by deepening intra-African trade,' he said. The president added that the Export Support Desk will play a pivotal role in helping local industries explore new international markets. The desk will provide exporters with regular updates on trade developments and tailored advice on exploring alternative markets. It will also offer guidance on market entry, compliance requirements, and connect businesses with South African Embassies and High Commissions abroad. He also announced plans to intensify trade missions in Africa and other global regions in the coming months. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 11. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news
